RECEIVABLES TRANSFER AGREEMENT
Dated as of September 23, 1994
Among
ALCO CAPITAL RESOURCE, INC.
as Transferor
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and
TWIN TOWERS INC.
as Transferee
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and
DEUTSCHE BANK AG, NEW YORK BRANCH
as Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I
THE COMMITMENT................... 2
1.01. Commitment...................................... 2
1.02. Limits on Commitment............................ 2
1.03. Transfer Procedure.............................. 2
1.04. Commitment Termination Date..................... 3
1.05. Voluntary Termination of Commitment or
Reduction of Maximum Investment................. 4
ARTICLE II
TRANSFEREE'S INTEREST................ 4
2.01. Assignment of Transferee's Interest............. 4
2.02. Transferee's Percentage......................... 4
2.03. Rate Tranches; Selection of Yield Periods....... 5
ARTICLE III
SETTLEMENT...................... 6
3.01. Non-Pay Out Settlement Procedures for
Collections..................................... 6
3.02. Pay Out Settlement Procedures for Collections... 8
3.03. Dilutions....................................... 11
3.04. Optional Reduction of Transferee's Investment... 11
3.05. Reporting by Servicer........................... 12
3.06. Delivery of Deemed Collections; Collections
Held in Trust................................... 13
ARTICLE IV
PAYMENT PROCEDURES; FEES AND YIELD PROTECTION... 13
4.01. Payments and Computations....................... 13
4.02. Interest on Overdue Amounts..................... 14
4.03. Fees............................................ 14
4.04. Yield Protection................................ 15
4.05. Interest Rate Hedging Agreements................ 16
ARTICLE V
CONDITIONS PRECEDENT.................. 17
5.01. Conditions Precedent to Initial Transfer........ 17
5.02. Conditions Precedent to All Transfers
and Reinvestments............................... 20
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES............. 21
6.01. Representations and Warranties of the
Transferor...................................... 21
ARTICLE VII
GENERAL COVENANTS OF TRANSFEROR............. 25
7.01. Affirmative Covenants of the Transferor......... 25
7.02. Reporting Requirements of the Transferor........ 26
7.03. Negative Covenants of the Transferor............ 28
ARTICLE VIII
ADMINISTRATION AND COLLECTION............ 29
8.01. Designation of Servicer......................... 29
8.02. Duties of Servicer.............................. 30
8.03. Rights of the Agent............................. 32
8.04. Responsibilities of Transferor.................. 33
8.05. Further Action Evidencing Transfers............. 33
8.06. Application of Obligors' Payments............... 35
ARTICLE IX
SECURITY INTEREST.................. 35
9.01. Grant of Security Interest...................... 35
9.02. Further Assurances.............................. 35
9.03. Remedies........................................ 36
ARTICLE X
TERMINATION EVENTS................. 36
10.01. Termination Events.............................. 36
10.02. Remedies........................................ 38
ARTICLE XI
THE AGENT...................... 39
11.01. Authorization and Action........................ 39
11.02. Agent's Reliance, Etc........................... 39
11.03. Agent and Affiliates............................ 40
ARTICLE XII
ASSIGNMENTS BY TRANSFEROR OR TRANSFEREE......... 40
12.01. Restrictions on Assignments..................... 40
12.02. Documentation; Notice of Assignment............. 41
12.03. Rights of Assignee.............................. 41
12.04. Allocation of Payments.......................... 41
12.05. Calculation of Earned Discount After Assignment. 41
12.06. Rights of Collateral Agent...................... 42
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ARTICLE XIII
INDEMNIFICATION................... 42
13.01. Indemnities by the Transferor................... 42
ARTICLE XIV
MISCELLANEOUS.................... 45
14.01. Amendments, Etc................................. 45
14.02. Notices, Etc.................................... 45
14.03. No Waiver; Remedies............................. 45
14.04. Binding Effect; Survival........................ 46
14.05. Costs, Expenses and Taxes....................... 46
14.06. No Proceedings.................................. 47
14.07. Confidentiality of Transferor Information....... 47
14.08. Confidentiality of Program Information.......... 49
14.09. No Recourse Against Other Parties............... 52
14.10. Definitions; Other Terms........................ 52
14.11. Captions and Cross References................... 52
14.12. Integration..................................... 52
14.13. Governing Law................................... 53
14.14. Waiver Of Jury Trial............................ 53
14.15. Consent To Jurisdiction; Waiver Of Immunities... 53
14.16. Execution in Counterparts....................... 53
14.17. Syndication of Liquidity........................ 54
14.18. Tax Treatment................................... 54
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APPENDIX
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APPENDIX A Definitions
SCHEDULES
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SCHEDULE 5.01(f) Filing Jurisdictions
SCHEDULE 6.01(i) Description of Material Adverse Changes
SCHEDULE 6.01(m) List of Offices of Transferor where Records
Are Kept
SCHEDULE 6.01(n) List of Designated Account Banks and Post Office Boxes
SCHEDULE 6.01(o)-1 Forms of Contracts
SCHEDULE 6.01(o)-2 Description of Credit and Collection Policy
SCHEDULE 14.02 Addresses for Notice
SCHEDULE A-1 Dealers
EXHIBITS
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EXHIBIT 1.03 Form of Transfer Request
EXHIBIT 3.05(a) Form of Periodic Report
EXHIBIT 5.01(f) Form of UCC Financing Statement
EXHIBIT 5.01(h) Form of Designated Account Agreement
EXHIBIT 5.01(i) Form of Opinion of Counsel for Transferor
EXHIBIT 5.01(j) Form of Opinion of Counsel for Agent
EXHIBIT 5.01(k) Form of UCC Financing Statement - Dealer
EXHIBIT 5.01(l) Form of Power of Attorney
EXHIBIT 5.01(p) Form of Alco Standard Letter
EXHIBIT A Form of Post Office Box Agreement
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RECEIVABLES TRANSFER AGREEMENT
RECEIVABLES TRANSFER AGREEMENT, dated as of September 23, 1994, among ALCO
CAPITAL RESOURCE, INC., a Delaware corporation (the "Transferor"), as
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transferor and initial Servicer (as defined herein), TWIN TOWERS INC., a
Delaware corporation (the "Transferee"), as transferee, and DEUTSCHE BANK AG, a
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banking corporation organized under the laws of the Federal Republic of Germany
("Deutsche Bank"), acting through its NEW YORK BRANCH ("DBNY"), as agent for the
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Transferee (in such capacity, the "Agent"). Unless otherwise indicated,
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capitalized terms used in this Agreement are defined in Appendix A.
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Background
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1. The Transferor has, and expects to have, Pool Receivables in which the
Transferor intends to transfer an undivided interest. The Transferor has
requested the Transferee, and the Transferee has agreed, subject to the terms
and conditions contained in this Agreement, to acquire from the Transferor such
undivided interest, herein referred to as the Transferee's Interest, in one or
more Transfers from time to time during the Reinvestment Period.
2. The Transferor and the Transferee also desire that, subject to the
terms and conditions of this Agreement, certain of the daily Collections in
respect of the Transferee's Interest be reinvested in Pool Receivables so that
the Transferee may maintain its Transferee's Investment fully invested in
uncollected Pool Receivables.
3. The Transferee expects generally to fund its Transfers and
Reinvestments through the issuance of Commercial Paper Notes. The Transferee
has entered into a Liquidity Agreement providing for the making by the Liquidity
Banks of loans secured by the Transferee's Interest in the event the Transferee
is unable to fund its Transfers or Reinvestments pursuant to this Agreement by
the issuance of Commercial Paper Notes or otherwise prefers to fund such
Transfers or Reinvestments under the Liquidity Agreement rather than by the
issuance of Commercial Paper Notes, or is unable to pay such Commercial Paper
Notes at maturity from its share of collections on Pool Receivables. The
Transferee has also entered into an Enhancement Agreement with the Enhancement
Bank providing for the issuance of a letter of credit to a trustee for the
holders of Commercial Paper Notes, and for the making of loans to the
Transferee, to provide funds for the payment of Commercial Paper Notes in the
circumstances described above when funding is not available under the Liquidity
Agreement.
4. The Transferee has appointed DBNY as its agent to perform certain
administrative duties for the Transferee, including, among other things, the
arrangement of the transactions provided for hereunder, the administration of
the funding of such transactions and the making of certain determinations
hereunder and in connection herewith.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01. Commitment. On the terms and subject to the conditions set
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forth in this Agreement (including Article V):
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(a) Transfers. Pursuant to Section 1.03, from time to time during the
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Reinvestment Period, upon request by the Transferor, the Transferee shall
acquire from the Transferor, in one or more transactions, an undivided
interest in the Pool Receivables and Related Property. Each of the initial
acquisitions of the Transferee's Interest hereunder and each subsequent
acquisition increasing the Transferee's Interest is herein called a
"Transfer".
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(b) Reinvestments. Pursuant to Section 3.01, during the Reinvestment
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Period, the Transferee shall permit the Servicer to cause certain of the
Collections in respect of the Transferee's Interest to be paid to
Transferor for reinvestment in the Pool Receivables and Related Property.
Each such payment is herein called a "Reinvestment".
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The Transferee's obligation to make such Transfers and Reinvestments is herein
called the "Commitment".
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SECTION 1.02. Limits on Commitment. Under no circumstances shall the
--------------------
Transferee accept any Transfer to the extent that, after giving effect to such
Transfer:
(a) the Transferee's Investment would exceed the Maximum Investment;
or
(b) the Unadjusted Transferee's Percentage would exceed the Maximum
Percentage.
SECTION 1.03. Transfer Procedure. (a) Transfer Request. Each Transfer
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from the Transferor by the Transferee shall be made on written request by the
Transferor to the Transferee and the
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Agent, substantially in the form of Exhibit 1.03 (a "Transfer Request"),
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received by the Agent not later than 11:00 a.m. (New York City time) on the
second Business Day preceding the date of such proposed Transfer. Each such
request shall specify the desired amount and date of such Transfer.
(b) Amount of Transfer Price. The amount of the transfer price paid by the
------------------------
Transferee for each Transfer shall be equal to the lesser of (x) the amount
proposed by the Transferor pursuant to Section 1.03(a) and (y) the maximum
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amount permitted under Section 1.02.
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(c) Funding of Transfer. On the date of each Transfer, the Transferee
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shall, upon satisfaction of the applicable conditions set forth in Article V,
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make available to the Agent in immediately available funds, at its office at 31
West 52nd Street, New York, New York 10019, the amount of the transfer price to
be paid for such Transfer (determined pursuant to Section 1.03(b)) and after
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receipt by the Agent of such funds, the Agent will make such funds immediately
available to the Transferor at such office.
SECTION 1.04. Commitment Termination Date. (a) The "Commitment
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Termination Date" shall be the earlier to occur of (i) September 20, 1995
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(herein, as the same may be extended, called the "Scheduled Commitment
--------------------
Termination Date"), and (ii) the date of termination of the Commitment pursuant
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to Section 1.04(c), 1.05 or 10.02.
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(b) The Scheduled Commitment Termination Date may be extended by six months
on the 20th of each March and September, commencing March 20, 1995; provided
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that (i) not less than 60 days prior to such day, the Transferor shall have
delivered a written request for such extension to the Transferee and the Agent,
and (ii) within 15 days prior to such day, the Transferee and the Agent shall
each have given its written consent to such extension (which consent may be
given or withheld by either such party in its sole discretion). As a condition
to any such extension, the Transferor and the Servicer shall deliver such
certificates, opinions of counsel or other documents as the Transferee or the
Agent may require.
(c) The Commitment shall terminate, and the Transferee shall have no
obligation to accept any further Transfers or make any further Reinvestments
hereunder, on the scheduled date of termination of either (A) the Liquidity
Banks' commitments under the Liquidity Agreement or (B) the Enhancement Bank's
commitment under the Enhancement Agreement. The Transferee agrees to give the
Transferor at least 30 days' prior written notice of the termination of the
Commitment pursuant to the foregoing sentence,
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but no failure to give or delay in giving such notice shall prevent or delay
such termination.
SECTION 1.05. Voluntary Termination of Commitment or Reduction of Maximum
-----------------------------------------------------------
Investment. The Transferor may, upon at least ten Business Days' notice to the
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Agent, terminate the Commitment in whole or reduce in part the unused portion of
the Maximum Investment; provided, however, that (a) each partial reduction shall
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be in an amount equal to $5,000,000 or an integral multiple thereof and (b)
after giving effect to such reduction, the remaining Maximum Investment will not
be less than $25,000,000.
ARTICLE II
TRANSFEREE'S INTEREST
SECTION 2.01. Assignment of Transferee's Interest. The Transferor hereby
-----------------------------------
assigns and transfers to the Transferee, effective on and as of the date of the
initial Transfer hereunder and, with respect to any increase in the Transferee's
Interest effected by an additional Transfer hereunder, on the date of such
additional Transfer, an undivided ownership interest, in a percentage equal to
the Transferee's Percentage as determined from time to time in accordance with
Section 2.02, in all Pool Receivables and Related Property, whether now existing
- ------------
or hereafter arising or acquired by the Transferor from time to time. Such
undivided ownership interest as in effect from time to time is herein called the
"Transferee's Interest".
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SECTION 2.02. Transferee's Percentage. The Transferee's Interest shall be
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in a percentage (the "Transferee's Percentage") equal at any time to the
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quotient obtained by dividing
(a) the sum of (i) the Transferee's Investment, (ii) the Discount
Factor, (iii) the Default Reserve, (iv) the Servicer's Fee Reserve and (v)
the Dilution Reserve (such sum being herein sometimes called the
"Transferee's Allocation"), by
----------------------- --
(b) the Net Pool Balance,
as most recently computed in accordance with this Section 2.02 (such quotient,
------------
expressed as a percentage, before giving effect to the following proviso, being
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the "Unadjusted Transferee's Percentage"); provided, however,
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(1) the Transferee's Percentage shall not be greater than 100%;
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(2) during the Pay Out Period, the Transferee's Percentage shall
be the greater of (x) the Transferee's Percentage in effect
immediately before the commencement of the Pay Out Period and (y) the
Transferee's Percentage as otherwise determined in accordance with
this Section 2.02; and
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(3) the Transferee's Percentage shall become zero at such time as
(A) the Transferee shall have received the accrued Earned Discount,
shall have recovered the Transferee's Investment and shall have
received all other amounts payable to the Transferee pursuant to this
Agreement and (B) the Servicer shall have received the accrued
Servicer's Fee.
The Transferee's Percentage shall initially be computed by the Servicer as of
the opening of business of the Servicer on the date of each Transfer, as of the
most recent Month End Date, and shall be recomputed in each Periodic Report and
each Pay Out Statement; provided, however, the Agent may from time to time
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request the Servicer to deliver a Periodic Report for the purpose of
recalculating the Transferee's Percentage, and the Servicer shall deliver such
Periodic Report within 10 Business Days after its receipt of such request. The
Transferee's Percentage shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation, if any, shall be made.
SECTION 2.03. Rate Tranches; Selection of Yield Periods. (a) From time
-----------------------------------------
to time, for purposes of determining the Yield Periods applicable to different
portions of the Transferee's Interest, and of calculating the Earned Discount
and Servicer's Fee with respect thereto, the Agent shall allocate the
Transferee's Interest to one or more tranches (each a "Rate Tranche"), each
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representing a portion of the Transferee's Investment (with respect to each Rate
Tranche, the "Transferee's Tranche Investment"). At any time, each Rate Tranche
-------------------------------
shall have only one Yield Period and one Transferee Rate applicable for purposes
of calculating Earned Discount, and shall be funded by (i) an issue of
Commercial Paper Notes, (ii) a Funding Advance, (iii) a borrowing of Liquidity
Loans funded by the Liquidity Banks ratably and having the same Yield Period, or
(iv) an Enhancement Draw, but not by more than one of the foregoing at the same
time.
(b) The Agent shall select the duration of the initial, and each
subsequent, Yield Period for each Rate Tranche in its discretion; provided that,
--------
so long as no Termination Event shall have occurred and be continuing, the Agent
shall use reasonable efforts, taking into account market conditions, to
accommodate the Transferor's preferences.
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(c) From time to time the Agent shall notify the Servicer of the number of
Rate Tranches, the Transferee's Tranche Investment of each Rate Tranche, the
Transferee Rate for such Rate Tranche and the duration of the current Yield
Period selected by it for each Rate Tranche.
ARTICLE III
SETTLEMENT
SECTION 3.01. Non-Pay Out Settlement Procedures for Collections. (a)
-------------------------------------------------
Daily Procedure. On each day during the Reinvestment Period, the Servicer shall
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deem an amount equal to the Transferee's Share of Collections of Pool
Receivables received or deemed received on such day to be received in respect of
the Transferee's Interest, and, out of the Transferee's Share of such
Collections, shall:
(i) hold in trust for the benefit of the Transferee an amount equal to
(A) the aggregate of the aggregate Earned Discount and Servicer's Fee
accrued through such day, less (B) the amount, if any, theretofore set
----
aside and then so held for the benefit of the Transferee in respect of such
Earned Discount and Servicer's Fee;
(ii) set aside and hold in trust for the Transferee an amount equal
to the excess, if any, of
(A) the greatest of
(I) if the Transferor shall have elected to reduce the
Transferee's Investment under Section 3.04, the amount of the
------------
proposed reduction,
(II) if the Transferee's Investment shall exceed the Maximum
Investment, the amount of such excess,
(III) if the Unadjusted Transferee's Percentage shall exceed
the Maximum Percentage, an amount equal to the minimum reduction
of the Transferee's Investment which (based on the Transferee
Rates currently in effect, and assuming that such reduction will
be applied to reduce the Transferee's Tranche Investments of the
Rate Tranches having the shortest remaining Yield Periods first)
would result in the Transferee's Percentage being no greater than
the Maximum Percentage, and
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(IV) if any of the conditions precedent to Reinvestment set
forth in Section 5.02 shall not be met, the Transferee's
------------
Investment, over
----
(B) the aggregate of the amounts theretofore set aside and then
so held for the benefit of the Transferee pursuant to this clause
------
(ii); and
(iii) subject to Section 5.02, pay the remainder, if any, of such
------------
Collections to the Transferor for application to Reinvestment, for the
benefit of the Transferee, in the Transferee's Interest in accordance with
Section 1.01(b).
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The Servicer shall first, apply the Transferor's Share of such Collections to
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any other amounts (other than Earned Discount and Transferee's Investment) then
due to Transferee or the Agent and second, pay any remaining portion of the
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Transferor's Share of such Collections to the Transferor.
(b) Settlement Date Procedure. Prior to the Pay Out Period, on each
-------------------------
Settlement Date, the Servicer shall deposit to the Agent's Account:
(i) out of the amounts set aside pursuant to clause (i) of Section
---------- -------
3.01(a), an amount equal to the Earned Discount and Servicer's Fee accrued
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during the related Yield Period with respect to the related Rate Tranche;
and
(ii) out of the amount, if any, set aside pursuant to clause (ii) of
-----------
Section 3.01(a) and not theretofore reinvested in accordance with Section
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3.01(d) or deposited to the Agent's Account pursuant to this Section
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3.01(b), an amount equal to the lesser of such amount and the Transferee's
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Tranche Investment of the related Rate Tranche;
provided, however, that if the Agent gives its consent (which consent may be
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revoked at any time), the Servicer may retain amounts which would otherwise be
deposited in respect of Servicer's Fee, in which case no distribution shall be
made in respect of Servicer's Fee under clause (c) below.
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In addition, if, on such Settlement Date, after reducing the Transferee's
Tranche Investment of the related Rate Tranche by the amount deposited pursuant
to clause (ii) above, the Transferee's Investment would be greater than the
-----------
Maximum Investment or the Unadjusted Transferee's Percentage would be greater
than the Maximum Percentage, then the Transferor shall pay to the Servicer, and
the Servicer shall deposit to the Agent's Account, an amount equal to the least
of (x) the minimum reduction of the Transferee's Investment which would result
in the Unadjusted Transferee's Investment not exceeding the Maximum
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Investment and the Unadjusted Transferee's Percentage not exceeding the Maximum
Percentage, (y) the Transferee's Tranche Investment of the related Rate Tranche
and (z) the Transferor's Collection Amount.
(c) Order of Application. Upon receipt by the Agent of funds deposited
--------------------
pursuant to subsection (b) on a Settlement Date for any Rate Tranche, the Agent
--------------
shall distribute them to the Persons, for the purposes and in the order of
priority set forth below:
(i) to the Transferee in payment of the accrued and unpaid Earned
Discount for such Rate Tranche;
(ii) to the Servicer in payment of the accrued and unpaid Servicer's
Fee payable with respect to such Rate Tranche; and
(iii) to the Transferee in reduction of the Transferee's Tranche
Investment of such Rate Tranche.
(d) Unreinvested Collections. During the Reinvestment Period, if on any
------------------------
date the amount of Collections theretofore set aside and then held by the
Servicer for the benefit of the Transferee pursuant to clause (ii) of Section
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3.01(a) shall exceed the maximum amount then required to be set aside and so
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held pursuant to such clause (ii), then, subject to the applicable conditions
-----------
precedent set forth in Section 5.02, the Servicer shall pay to the Transferor
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the amount of such excess Collections, for application to Reinvestment in
accordance with Section 1.01(b). To the extent and for so long as such
---------------
Collections may not be so reinvested, the Servicer shall hold such Collections
in trust for the benefit of the Transferee in a separate deposit account
containing only such Collections and no other funds. On each Settlement Date
with respect to any Rate Tranche, the Servicer shall pay to the Agent for the
account of the Transferee, in reduction of the Transferee's Investment, the
amount of Collections then held in trust pursuant to the next preceding sentence
or, if less, the Transferee's Tranche Investment of such Rate Tranche; any such
amounts remaining after such application shall continue to be held in trust
pursuant to this paragraph (d) and shall be applied on the next successive
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Settlement Dates until such amount has been reduced to zero. The Transferee's
Investment shall not be deemed reduced by any amount held in trust pursuant to
this subsection (d) unless and until, and then only to the extent that, such
--------------
amount is finally paid to the Agent in accordance with the next preceding
sentence.
SECTION 3.02. Pay Out Settlement Procedures for Collections. (a) Daily
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Procedure. During the Pay Out Period, on each day, the Servicer shall (i) set
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aside and hold in trust
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for the Transferee the Transferee's Share of the Collections of Pool Receivables
received by the Servicer, and (ii) first, apply the Transferor's Share of such
-----
Collections to any other amounts (other than Earned Discount and Transferee's
Investment) then due to Transferee or the Agent and second, pay any remaining
------
portion of the Transferor's Share of such Collections to the Transferor.
(b) Settlement Date Procedure. During the Pay Out Period, on each
-------------------------
Settlement Date for any Rate Tranche, subject to Section 3.02(d), the Servicer
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shall deposit to the Agent's Account the amounts set aside pursuant to Section
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3.02(a), but not to exceed the sum of (i) the accrued and unpaid Earned Discount
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with respect to such Rate Tranche, (ii) the Transferee's Tranche Investment of
such Rate Tranche, (iii) the aggregate of other amounts (other than the
Transferee's Investment, Earned Discount and Servicer's Fee) owed hereunder by
the Transferor to the Transferee or the Agent, and (iv) the accrued Servicer's
Fee payable with respect to such Rate Tranche. Any amounts in excess of the
amount required to be deposited in the Agent's Account pursuant to the previous
sentence shall continue to be set aside and held in trust by the Servicer for
application on the next succeeding Settlement Date(s).
(c) Order of Application. Upon receipt of funds deposited to the Agent's
--------------------
account pursuant to Section 3.02(b), subject to Section 3.02(d), the Agent shall
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distribute them to the Persons, for the purposes and in the order of priority
set forth below:
(i) to the Transferee in payment of the accrued and unpaid
Earned Discount for such Rate Tranche;
(ii) if the Servicer is a Person other than the Transferor or an
Affiliate of the Transferor, to the Servicer in payment of the accrued
and unpaid Servicer's Fee with respect to such Rate Tranche;
(iii) to the Transferee in reduction of the Transferee's Tranche
Investment with respect to such Rate Tranche;
(iv) to the Transferee or the Agent (as the case may be) in
payment of any other amounts owed by the Transferor hereunder to the
Transferee or the Agent (other than the Transferee's Investment,
Earned Discount and Servicer's Fee); and
(v) to the Servicer in payment of the accrued Servicer's Fee
payable with respect to such Rate Tranche, to the extent not paid
pursuant to clause (ii) above.
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(d) Priorities in Event of Funding Advances, Liquidity Loans or Enhancement
-----------------------------------------------------------------------
Draw. If on any day during the Pay Out Period any Rate Tranche is funded by a
- ----
Funding Advance, a borrowing of Liquidity Loans or an Enhancement Draw, then:
(i) if the aggregate amount of Collections set aside and held in trust
pursuant to Section 3.02(a) is less than the aggregate accrued and unpaid
---------------
Earned Discount with respect to all Rate Tranches, then such Collections
shall be allocated first to accrued and unpaid Earned Discount on Rate
-----
Tranches funded by Funding Advances, second to accrued and unpaid Earned
------
Discount on Rate Tranches funded by Liquidity Loans, third to accrued and
-----
unpaid Earned Discount on Rate Tranches funded by Commercial Paper Notes,
and fourth to accrued and unpaid Earned Discount on Rate Tranches funded by
------
Enhancement Draws, and, in the case of each of clauses first, second, third
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and fourth above, first to the Rate Tranches having the shortest remaining
------
Yield Periods, to the extent that funds have not been set aside or
deposited with the Agent in respect thereof; and
(ii) no Collections shall be deposited in the Agent's Account (unless
requested by the Agent for later distribution in accordance with this
Section 3.02(d)) or distributed by the Agent to the Transferee (A) in
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respect of the Transferee's Tranche Investment of any Rate Tranche funded
by Liquidity Loans unless the Transferee's Tranche Investments of all Rate
Tranches funded by Funding Advances shall have been reduced to zero, or
Collections equal to such Transferee's Tranche Investments shall have been
deposited in the Agent's Account for distribution to the Transferee in
reduction of such Transferee's Tranche Investments, (B) in respect of the
Transferee's Tranche Investment of any Rate Tranche funded by Commercial
Paper Notes unless the Transferee's Tranche Investments of all Rate
Tranches funded by Funding Advances or Liquidity Loans shall have been
reduced to zero, or Collections equal to such Transferee's Tranche
Investments shall have been deposited in the Agent's Account for
distribution to the Transferee in reduction of such Transferee's Tranche
Investments, or (C) in respect of the Transferee's Tranche Investment of
any Rate Tranche funded by any Enhancement Draw unless the Transferee's
Tranche Investments of all Rate Tranches funded by Funding Advances,
Liquidity Loans or Commercial Paper Notes shall have been reduced to zero,
or Collections equal to such Transferee's Tranche Investments shall have
been deposited in the Agent's Account for distribution to the Transferee in
reduction of such Transferee's Tranche Investments.
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SECTION 3.03. Dilutions. (a) If on any day the Unpaid Balance of any
---------
Pool Receivable is
(i) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, any allowances or billing
errors, any trade-in or trade-up, or any adjustment by the Transferor, any
Affiliate of the Transferor or by the Servicer or any early termination,
refinancing, consolidation or replacement of the Contract related to such
Pool Receivable,
(ii) reduced or cancelled as a result of a setoff in respect of any
claim or dispute by the Obligor thereof against the Transferor or any
Affiliate of the Transferor (individually or as Servicer) or any other
Person (whether such claim arises out of the same or a related or an
unrelated transaction),
(iii) reduced on account of the obligation of the Transferor or an
Affiliate of the Transferor (individually or as Servicer) to pay to the
related Obligor any rebate or refund, or
(iv) determined by the Agent, the Servicer or the Transferor to have
been less than the Unpaid Balance of such Receivable used in calculating
the Net Pool Balance for purposes of the most recent Periodic Report or
Settlement Statement,
then, on such day, the Transferor shall be deemed to have received a Collection
of such Pool Receivable in the amount of such reduction or cancellation or, in
the case of clause (iv) above, by the amount of the difference between the
-----------
actual Unpaid Balance and the Unpaid Balance as so reported.
(b) If on any day (i) any of the representations or warranties of the
Transferor set forth in Section 6.01(k) or (o) shall not be true with respect to
--------------- ---
a Pool Receivable (other than solely by reason of such Pool Receivable's being a
Defaulted Receivable), or (ii) when the Servicer or the Transferor delivers any
Periodic Report or Settlement Statement, any Pool Receivable the Unpaid Balance
of which is included in the computation of the Net Pool Balance therein shall
not be an Eligible Receivable, then, on such day, the Transferor shall be deemed
to have received a Collection of such Pool Receivable in the amount of the
Unpaid Balance of such Pool Receivable.
SECTION 3.04. Optional Reduction of Transferee's Investment. The
---------------------------------------------
Transferor may at any time elect to cause the reduction of the Transferee's
Investment as follows:
- 11 -
(a) the Transferor shall give the Agent at least 10 Business Days'
prior written notice of such reduction (including the amount of such
proposed reduction and the proposed date on which such reduction will
commence);
(b) on the proposed date of commencement of such reduction and on each
day thereafter, the Servicer shall set aside Collections and hold them in
trust for the Transferee under clause (ii) of Section 3.01(a) until the
----------- ---------------
amount so set aside shall equal the desired amount of reduction; and
(c) the Servicer shall set aside and hold such Collections for the
benefit of the Transferee and, on each Settlement Date with respect to any
Rate Tranche, shall pay to the Agent for the benefit of the Transferee, in
reduction of the Transferee's Investment, the amount of such Collections so
held or, if less, the Transferee's Tranche Investment of such Rate Tranche
(it being understood that the Transferee's Investment shall not be deemed
reduced by any amount set aside or held pursuant to this Section 3.04
------------
unless and until, and then only to the extent that, such amount is finally
paid to the Agent as aforesaid);
provided that,
- --------
(i) the amount of any such reduction shall be not less than
$5,000,000 and shall be an integral multiple of $1,000,000, and the
Transferee's Investment after giving effect to such reduction shall be not
less than $10,000,000 (unless the Transferee's Investment shall thereby be
reduced to zero),
(ii) the Transferor shall use reasonable efforts to attempt to choose
a reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude in a single Yield Period with respect
to a Rate Tranche, and
(iii) such proposed reduction shall be applied, unless the Agent
shall consent otherwise, to the Rate Tranche with the shortest remaining
Yield Period.
SECTION 3.05. Reporting by Servicer. (a) On or prior to the 15th day (or
---------------------
if such day is not a Business Day, on the next Business Day) of each month, the
Servicer shall prepare and forward to the Agent a Periodic Report, executed by
an Authorized Servicing Officer, relating to the Transferee's Interest as of the
close of business of the Servicer on the next preceding Month End Date. In
addition, if at any time the Agent shall so request, then, within 10 Business
Days after the later of (i) the date of such request and (ii) such other date as
the Agent may
- 12 -
designate in such request as the effective date of the requested report, the
Servicer shall prepare and deliver to the Agent a Periodic Report, executed by
an Authorized Servicing Officer, relating to the Transferee's Interest as of the
close of business on the date of such request or such other effective date, as
applicable.
(b) During the Pay Out Period, on the Settlement Date of each Settlement
Period for each Rate Tranche, the Servicer shall prepare and forward to the
Agent a Pay Out Statement as of the close of business of the Servicer on such
Settlement Date.
SECTION 3.06. Delivery of Deemed Collections; Collections Held in Trust.
---------------------------------------------------------
(a) Whenever the Transferor is deemed to receive Collections pursuant to
Section 3.03, the Transferor shall forthwith deliver to the Servicer the amount
- ------------
of such deemed Collections, and the Servicer shall set aside and hold or
distribute such Collections as and to the same extent as if such Collections had
actually been received on the date of such delivery to Servicer. If Collections
are then being paid to the Agent, or lock boxes or accounts directly or
indirectly owned or controlled by the Agent, the Servicer shall forthwith cause
such deemed Collections to be paid to the Agent or to such lock boxes or
accounts, as applicable.
(b) So long as the Transferor shall hold any Collections or deemed
Collections required to be paid to the Servicer or the Agent, it shall hold such
Collections in trust and separate and apart from its own funds and shall clearly
mark its records to reflect such trust.
ARTICLE IV
PAYMENT PROCEDURES; FEES AND YIELD PROTECTION
SECTION 4.01. Payments and Computations. (a) All amounts to be paid or
-------------------------
deposited by the Transferor or the Servicer to or for the account of the
Transferee or the Agent hereunder shall be paid or deposited in accordance with
the terms hereof no later than 11:00 a.m. (New York City time) on the day when
due in lawful money of the United States of America in immediately available
funds to account #104636460008 or such other account as the Agent may designate
(the "Agent's Account") at DBNY's office at 31 West 52nd Street, New York, New
---------------
York 10019 or at such other place in New York City as the Agent may designate.
(b) All computations of interest, Earned Discount, Negative Spread Fee and
any other fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
- 13 -
SECTION 4.02. Interest on Overdue Amounts. The Transferor or Servicer,
---------------------------
as applicable, shall, to the extent permitted by law, pay to the Agent interest
on all amounts not paid or deposited when due hereunder at 1% per annum above
--- -----
the Alternate Base Rate, payable on demand, provided, however, that such
-------- -------
interest rate shall not at any time exceed the maximum rate permitted by
applicable law.
SECTION 4.03. Fees. (a) Certain Fees. The Transferor shall pay to the
---- ------------
Agent and the Transferee the fees in the amounts and at the times set forth in
the letter from the Agent to the Transferor, dated as of the date hereof (as
amended from time to time, the "Fee Letter").
----------
(b) Note Fee. From the date hereof until the Final Pay Out Date, the
--------
Transferor shall pay to the Agent for the account of the Transferee a commercial
paper transaction fee ("Note Fee") in an amount equal to the sum of (i) the
--------
product of (x) the amount of the per-note fee paid or payable by the Transferee
to the issuing agent and depositary for the Commercial Paper Notes in connection
with the completion, authentication and delivery of each Commercial Paper Note,
as notified by the Agent to the Transferor and the Servicer from time to time,
times (y) the number of Commercial Paper Notes issued by the Transferee to fund
- -----
the Transferee's Interest hereunder during the period for which such Note Fee is
payable and to which such per-note fee applies, as notified by the Agent to the
Transferor and the Servicer, plus (ii) the product of (x) the amount of the per-
----
trade fee paid or payable by the Transferee to the Depository Trust Company (or
any other or successor clearing corporation through which the Commercial Paper
Notes may be issued) in connection with the issuance, payment or redemption of
Commercial Paper Notes, as notified by the Agent to the Transferor and the
Servicer from time to time, times (y) the number of transactions in Commercial
-----
Paper Notes issued by the Transferee to fund the Transferee's Interest hereunder
during the period for which such Note Fee is payable and to which such per-trade
fee applies, as notified by the Agent to the Transferor and the Servicer. Such
Note Fee shall be paid in arrears on the last Business Day of each February and
August of each calendar year and on the Final Pay Out Date for the number of
Commercial Paper Notes which were issued, and the number of Commercial Paper
Note trades that were consummated, to fund the Transferee's Interest hereunder
during the six month period ending on the last day of the immediately preceding
December and June, respectively, or in the case of the Final Pay Out Date, other
period then ending and for which no Note Fee shall have theretofore been paid.
The Agent shall notify the Transferor and the Servicer on or prior to the last
day of each January and July of the Note Fee due on the last Business Day of the
following February and August, respectively.
- 14 -
SECTION 4.04. Yield Protection. (a) If (i) Regulation D or (ii) any
----------------
Regulatory Change occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty or other charge
with respect to the Transferee's Interest or any portion thereof, or any
obligations or right to accept or make Transfers or Reinvestments or to
provide funding therefor, or shall change the basis of taxation of payments
to the Affected Party of any of the Transferee's Investment or Earned
Discount owned by, owed to or funded by it or any other amounts due under
this Agreement in respect of the Transferee's Interest or any portion
thereof or its obligations or rights, if any, to accept or make Transfers
or Reinvestments or to provide funding therefor (except for changes in the
rate of tax on the overall net income of such Affected Party imposed by the
United States of America, by the jurisdiction in which such Affected
Party's principal executive office is located and, if such Affected Party's
principal executive office is not in the United States of America, by the
jurisdiction where such Affected Party's principal office in the United
States is located); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of Earned Discount),
special deposit or similar requirement against assets of any Affected
Party, deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity deemed by the
Federal Reserve Board to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting the Transferee's
Interest or any portion thereof owned or funded by any Affected Party, or
its obligations or rights, if any, to accept or make Transfers or
Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or any successor thereto) assesses, deposit
insurance premiums or similar charges, or shall impose on any Affected
Party a requirement to maintain deposit insurance;
and the result of any of the foregoing is or would be
- 15 -
(x) to increase the cost or to impose a cost on (I) an Affected Party
accepting or funding or making or maintaining any Transfers or
Reinvestments, any loans or other extensions of credit under the Liquidity
Agreement, or any Enhancement Draw, or any commitment of such Affected
Party with respect to any of the foregoing, or (II) the Agent for
continuing its or the Transferor's relationship with the Transferee,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or any other Transaction Document, or
under the Liquidity Agreement or the Enhancement Agreement with respect
thereto, or
(z) in the sole determination of such Affected Party, to reduce the
rate of return on the capital of an Affected Party as a consequence of its
obligations hereunder or arising in connection herewith to a level below
that which such Affected Party could otherwise have achieved (taking into
consideration the policies of such Affected Party with respect to capital
adequacy) by an amount deemed by such Affected Party to be material,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis of such demand), the
Transferor shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such additional or increased
cost or such reduction.
(b) Each Affected Party will promptly notify the Transferor and the Agent
of any event of which it has knowledge which occurs after the date hereof and
will entitle such Affected Party to compensation pursuant to this Section 4.04;
------------
provided, however, no failure to give or delay in giving such notification shall
- -------- -------
adversely affect the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this Section
-------
4.04, an Affected Party may use any reasonable averaging and attribution methods
- ----
that it (in its sole discretion) shall deem applicable. Any Affected Party when
making a claim under this Section 4.04 shall submit to the Transferor a
------------
statement as to such increased cost or reduced return (including calculation
thereof in reasonable detail), which statement shall, in the absence of manifest
error, be conclusive and binding upon the Transferor.
SECTION 4.05. Interest Rate Hedging Agreements. Promptly after the
--------------------------------
Commitment Termination Date, the Transferee will enter into, and will maintain
throughout the Pay Out Period, one or
- 16 -
more interest rate swap agreements, interest rate collars, interest rate caps or
other interest rate hedging arrangements, with one or more financial
institutions, including the Agent, whose long-term unsecured debt obligations
are rated at least Aaa by Moody's or AAA by S&P, with an amortizing notional
amount equal to Transferee's good faith determination of its outstanding
Transferee's Investment from time to time during the Pay Out Period (the
"Hedging Arrangements"). Such Hedging Arrangements shall protect Transferee
- ---------------------
from differences between a fixed interest rate equal to the interpolated yield
to maturity of the Treasury security with a maturity equal to the then Average
Maturity and a floating interest rate equal to the Commercial Paper Rate or
Eurodollar Rate (Reserve Adjusted). The Agent and the Transferee agree to use
their reasonable efforts to obtain such Hedging Arrangements at a commercially
reasonable cost, in light of the circumstances of such transaction. Transferor
hereby agrees to pay, or to reimburse Transferee for, on demand, any and all
costs, expenses and liabilities of Transferee incurred in connection with such
Hedging Arrangements (other than periodic net payments of fixed rate interest
due to the counterparty thereof), including any arrangement fees, legal costs
and early termination payments with respect thereto; provided, that, to the
--------
extent that the notional amount of such Hedging Arrangements exceeds the then
Transferee's Investment, Transferee shall assign to Transferor, and Transferor
shall accept, the portion of such Hedging Arrangement related to such excess, in
which event, Transferor shall be responsible for all obligations, and be
entitled to all benefits, associated with such portion of the Hedging
Arrangements. Notwithstanding the foregoing, if (i) the unsecured short term
obligations of the Transferor are rated at least A-1+ by S&P and P-1 by Moody's,
(ii) the Transferor has requested that the Transferee accept its recourse
obligation for Earned Discount and (iii) the Transferor has executed and
delivered to the Transferee and the Agent an agreement pursuant to which the
Transferor agrees to pay, on a recourse basis, Earned Discount as and when due,
then, for so long as the Transferor maintains the ratings described in the
foregoing clause (i), the Transferee shall accept such agreement in place of
----------
maintaining Hedging Arrangements.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to Initial Transfer. The initial
----------------------------------------
Transfer hereunder is subject to the condition precedent that the Agent shall
have received, on or before the date of such Transfer, the following, each
(unless otherwise indicated) dated (or dated as of) such date and in form and
substance satisfactory to the Agent:
- 17 -
(a) This Agreement, duly executed by the Transferor (as Transferor and
initial Servicer);
(b) A copy of the resolutions of the Board of Directors of the
Transferor approving this Agreement, and the other Transaction Documents to
be delivered by it hereunder and the transactions contemplated hereby,
certified by its Secretary or Assistant Secretary; a copy of the
resolutions of the Board of Directors of Alco Standard approving the
Support Agreement, certified by its Secretary or Assistant Secretary;
(c) Good standing certificates for Alco Standard issued by the
Secretaries of State of Pennsylvania and Ohio; good standing certificates
for the Transferor issued by the Secretaries of State of Delaware, Georgia,
California, Minnesota and Missouri, in each case dated as of a recent date
acceptable to the Agent;
(d) A certificate of the Secretary or an Assistant Secretary of the
Transferor certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the Agent
and the Transferee may conclusively rely until such time as the Agent shall
receive from the Transferor a revised certificate meeting the requirements
of this subsection (d));
--------------
(e) The Articles of Incorporation of the Transferor and of Alco
Standard, duly certified by the Secretary of State of Delaware and the
Secretary of State of Ohio, respectively, as of a recent date acceptable to
Agent, together with a copy of the By-laws of the Transferor and of Alco
Standard, duly certified by the Secretary or an Assistant Secretary of the
Transferor or Alco Standard, as the case may be;
(f) Acknowledgment copies of proper Financing Statements (Form UCC-1),
substantially in the form attached hereto as Exhibit 5.01(f) (with such
---------------
modifications, if any, as may be necessary or appropriate to conform to the
law, customary practice or standard forms of a particular jurisdiction),
filed on or prior to the date of the initial Transfer, naming the
Transferor as the debtor and transferor of Receivables or an undivided
interest therein and the Transferee as the secured party and transferee, or
other, similar instruments or documents, as may be necessary or, in the
opinion of the Agent, desirable under the UCC or any comparable law of all
appropriate jurisdictions (including those jurisdictions listed on Schedule
--------
5.01(f) hereto) to
-------
- 18 -
perfect the Transferee's Interest and the security interest granted to the
Transferee under Article IX hereof;
----------
(g) A search report or reports provided in writing to the Agent by
LEXIS Document Services, Inc. as of a recent date (or dates) acceptable to
the Agent, listing all effective financing statements that name the
Transferor as debtor and that are filed in the jurisdictions in which
filings were made pursuant to subsection (f) above and in such other
--------------
jurisdictions that the Agent shall reasonably request, together with copies
of such financing statements (none of which shall cover any Receivables or
Contracts or interests therein or Collections or proceeds of any thereof);
(h) Duly executed copies of Designated Account Agreements with each of
the Designated Account Banks; duly executed copies of Post Office Box
Agreements with respect to each Post Office Box;
(i) A favorable opinion of Karin H. Kinney, counsel to the Transferor
and Alco Standard, in substantially the form of Exhibit 5.01(i);
---------------
(j) A favorable opinion of Mayer, Brown & Platt, counsel for the
Agent, substantially in the form of Exhibit 5.01(j);
---------------
(k) Acknowledgment copies of proper Financing Statements (Form UCC-1),
substantially in the form attached hereto as Exhibit 5.01(k) (with such
---------------
modifications, if any, as may be necessary or appropriate to conform to the
law, customary practice or standard forms of a particular jurisdiction),
filed on or prior to the date of the initial Transfer in the jurisdictions
of the principal places of business of the dealers listed on Schedule A-1,
------------
naming such dealers, respectively, as debtors and transferors of
Receivables, the Transferor as the secured party and transferee and
Transferee as the assignee, or other, similar instruments or documents, as
may be necessary or, in the opinion of the Agent, desirable under the UCC
or any comparable law of all appropriate jurisdictions to perfect
Transferor's interest in the Receivables;
(l) Such powers of attorney as the Agent shall reasonably request to
enable the Agent to collect all amounts due under any and all Pool
Receivables, which powers of attorney shall be substantially in the form of
Exhibit 5.01(l) or in such other form as the Agent may reasonably request;
---------------
- 19 -
(m) A Periodic Report as of the most recent Month End Date (in which
the Transferee's Interest and the components thereof shall be calculated
after giving effect to the initial Transfer);
(n) A report from independent certified public accountants or other
auditors acceptable to the Agent, with respect to the application of
certain procedures to the Transferor's books and records relating to the
Pool Receivables;
(o) A copy of the Support Agreement, certified as true, correct and
complete by an officer of Alco Standard;
(p) A letter executed by Alco Standard substantially in the form of
Exhibit 5.01(p); and
---------------
(q) An interest rate protection agreement between Transferor and DBNY,
and an assignment agreement related thereto.
SECTION 5.02. Conditions Precedent to All Transfers and Reinvestments.
-------------------------------------------------------
Each Transfer (including the initial Transfer) and each Reinvestment hereunder
shall be subject to the further conditions precedent that on the date of such
Transfer or Reinvestment the following statements shall be true (and the
Transferor by accepting the amount of such Transfer or by receiving the proceeds
of such Reinvestment shall be deemed to have certified that):
(a) The representations and warranties contained in Section 6.01 are
------------
correct on and as of such day as though made on and as of such day and
shall be deemed to have been made on such day,
(b) No event has occurred and is continuing, or would result from such
Transfer or Reinvestment, that constitutes a Termination Event or Unmatured
Termination Event,
(c) In the case of a Reinvestment, the amount of the Reinvestment will
not exceed the amount available therefor under Section 3.01, and in the
------------
case of a Transfer, after giving effect thereto, the Transferee's
Investment will not exceed the Maximum Investment and the Unadjusted
Transferee's Percentage will not exceed the Maximum Percentage, and
(d) The Commitment Termination Date shall not have occurred;
- 20 -
provided, however, the absence of the occurrence and continuance of an Unmatured
- -------- -------
Termination Event shall not be a condition precedent to any Reinvestment or to
any Transfer on any day which does not cause the Transferee's Investment, after
giving effect to such Transfer, to exceed the Transferee's Investment as of the
opening of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor represents and warrants as follows:
(a) Organization and Good Standing. The Transferor has been duly
------------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are presently
owned and such business is presently conducted, and had at all relevant
times, and now has, all necessary power, authority, and legal right to
acquire and own the Pool Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualification, licenses or approvals.
(c) Power and Authority; Due Authorization. The Transferor (i) has
--------------------------------------
all necessary power, authority and legal right to execute and deliver this
Agreement and the other Transaction Documents, to carry out the terms of
the Transaction Documents, and to transfer and assign the Transferee's
Interest on the terms and conditions herein provided, and (ii) has duly
authorized by all necessary corporate action the execution, delivery and
performance of this Agreement and the other Transaction Documents and the
transfer and assignment of the Transferee's Interest on the terms and
conditions herein provided.
(d) Valid Transfer; Binding Obligations. This Agreement constitutes a
-----------------------------------
valid transfer and assignment of the Transferee's Interest to the
Transferee, enforceable against creditors of, and purchasers from, the
Transferor; and this Agreement constitutes, and each other Transaction
Document to be signed by the Transferor when duly executed and
- 21 -
delivered will constitute, a legal, valid and binding obligation of the
Transferor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by the
------------
Transferor of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will not
(i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under, the articles of incorporation or by-laws of the Transferor,
or any indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument to which the Transferor is
a party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Lien upon any of the Transferor's
properties pursuant to the terms of any such indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or other agreement
or instrument, other than this Agreement, or (iii) violate any law or any
order, rule, or regulation applicable to the Transferor of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Transferor or any
of its properties.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending, or threatened, before, and there has been no injunction, decree or
other decision issued or made by, any court, regulatory body,
administrative agency, or other tribunal or governmental agency or
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the transfer and assignment
of the Transferee's Interest or any portion thereof or the consummation of
any of the other transactions contemplated by this Agreement or any other
Transaction Document, (iii) seeking any determination or ruling that might
have a Material Adverse Effect or (iv) seeking to adversely affect the
federal income tax attributes of the Transfers hereunder.
(g) Bulk Sales Act. No transaction contemplated hereby requires
--------------
compliance with any bulk sales act or similar law.
- 22 -
(h) Government Approvals. No authorization or approval or other
--------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by the Transferor of this Agreement or any other Transaction Document,
except for the filing of the UCC Financing Statements referred to in
------
Article V, all of which, at the time required in Article V, shall have been
--------- ---------
duly made and shall be in full force and effect.
(i) Financial Condition. (x) The consolidated balance sheets of the
-------------------
Transferor and its consolidated subsidiaries as at September 30, 1993, and
the related statements of income, cash flows and shareholders' equity of
the Transferor and its consolidated subsidiaries for the fiscal year then
ended, certified by Ernst & Young, independent certified public
accountants, and the consolidated balance sheets of the Transferor and its
consolidated subsidiaries as at December 31, 1993, March 31, 1994 and June
30, 1994, respectively, and the related statements of income, cash flows
and shareholders' equity of the Transferor and its consolidated
subsidiaries for the periods then ended, in each case, copies of which have
been furnished to the Agent, fairly present the consolidated financial
condition, business, business prospects and operations of the Transferor
and its consolidated subsidiaries as at such dates and the consolidated
results of the operations of the Transferor and its consolidated
subsidiaries for the period ended on such dates, all in accordance with
generally accepted accounting principles consistently applied, and (y)
since September 30, 1993 there has been no material adverse change in any
such condition, business, business prospects or operations except as
described in Schedule 6.01(i).
----------------
(j) Margin Regulations. The use of all funds obtained by the
------------------
Transferor under this Agreement will not conflict with or contravene any of
Regulations G, T, U and X promulgated by the Board of Governors of the
Federal Reserve System from time to time.
(k) Quality of Title. (i) Each Pool Receivable, together with the
----------------
Related Property, is owned by the Transferor free and clear of any Lien
(other than any Lien arising solely as the result of any action taken by
the Transferee (or any assignee thereof) or by the Agent) except as created
hereby; (ii) when the Transferee accepts a Transfer, it shall have acquired
and shall at all times thereafter continuously maintain a valid and
perfected first priority undivided percentage ownership interest, in a
percentage equal to the Transferee's Percentage in effect
- 23 -
from time to time, in each Pool Receivable and in the Related Property,
free and clear of any Lien (other than any Lien arising solely as the
result of any action taken by the Transferee (or any assignee thereof) or
by the Agent); and (iii) no effective financing statement or other
instrument similar in effect covering any Pool Receivable, any interest
therein or any of the Related Property is on file in any recording office
except such as may be filed (A) in favor of the Transferor in accordance
with the Contracts or against the dealers, (B) in favor of the Transferee
or the Agent in accordance with this Agreement or in connection with any
Lien arising solely as the result of any action taken by the Transferee (or
any assignee thereof) or by the Agent, or (C) in favor of DBNY, as
Collateral Agent, or any successor in such capacity, as described in
Section 121.01.
--------------
(l) Accurate Reports. No Periodic Report or Pay Out Statement (if
----------------
prepared by the Transferor, or to the extent that information contained
therein was supplied by the Transferor) or other information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished by the Transferor to the Agent or the Transferee in connection
with this Agreement was or will be inaccurate in any material respect as of
the date it was or will be dated or (except as otherwise disclosed to the
Agent or the Transferee, as the case may be, at such time) as of the date
so furnished, or contained or will contain any material misstatement of
fact or omitted or will omit to state a material fact or any fact necessary
to make the statements contained therein not materially misleading.
(m) Offices. The chief place of business and chief executive office
-------
of the Transferor are located at the address of the Transferor referred to
in Section 14.02, and the offices where the Transferor keeps all its books,
-------------
records and documents evidencing or included in the Pool Receivables and
Related Property are located at the addresses specified in Schedule 6.01(m)
----------------
(or at such other locations, notified to the Agent in accordance with
Section 7.01(f), in jurisdictions where all action required by Section 8.05
--------------- ------------
has been taken and completed).
(n) Designated Accounts; Post Office Boxes. The names and addresses
--------------------------------------
of all the Designated Accounts Banks, together with the account numbers of
the Designated Accounts of the Transferor at such Designated Account Banks,
are specified in Schedule 6.01(n) (or have been notified to the Agent in
----------------
accordance with Section 7.03(d)). The addresses and numbers of all Post
---------------
Office Boxes are specified in Schedule 6.01(n) (as have been notified to
----------------
the Agent in accordance with Section 7.03(d)).
---------------
- 24 -
(o) Eligible Receivables. Each Receivable included in the Net Pool
--------------------
Balance as an Eligible Receivable on any date shall be an Eligible
Receivable on such date.
(p) Servicing Programs. Any and all programs used by the Transferor
------------------
in the servicing of the Receivables Pool are owned by it and not leased or
licensed, except for all licensed IBM operating system software. No
license or approval is required for the Agent's use of any program used by
the Servicer in the administration of the Receivables, other than those
which have been obtained and are in full force and effect.
ARTICLE VII
GENERAL COVENANTS OF TRANSFEROR
SECTION 7.01. Affirmative Covenants of the Transferor. From the date
---------------------------------------
hereof until the Final Pay Out Date, the Transferor will, unless the Agent shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
-------------------------
all applicable laws, rules, regulations and orders applicable to the
Transferor, including those with respect to the Pool Receivables and
related Contracts.
(b) Preservation of Corporate Existence. Subject to Section 7.03(e),
----------------------------------- ---------------
preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would have a Material Adverse
Effect.
(c) Audits. (i) At any time and from time to time during regular
------
business hours, upon reasonable notice, permit the Agent, or its agents or
representatives, (A) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Transferor
relating to Pool Receivables, including, without limitation, the related
Contracts and purchase orders and other agreements, and (B) to visit the
offices and properties of the Transferor for the purpose of examining such
materials described in clause (i)(A) next above, and to discuss matters
-------------
relating to Pool Receivables or the Transferor's performance hereunder with
any of the officers or employees of the Transferor having knowledge of such
matters; and (ii) without limiting the provisions of
- 25 -
clause (i) next above, from time to time on request of the Agent given not
----------
more than once in each calendar year so long as no Termination Event or
Unmatured Termination Event shall have occurred and be continuing, permit
certified public accountants or other auditors, selected by the Transferor
and reasonably acceptable to the Agent, to conduct, at the Transferor's
expense, a review of the Transferor's books and records with respect to the
Pool Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement
---------------------------------------
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Pool Receivable and all Collections of and adjustments to each existing
Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. At its
---------------------------------------------------------
expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all purchase orders and other
agreements related to such Pool Receivables.
(f) Location of Records. Keep its chief place of business and chief
-------------------
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all original documents
relating thereto), at the address(es) of the Transferor referred to in
Section 6.01(m) or, upon 30 days' prior written notice to the Agent, at
---------------
such other locations in jurisdictions where all action required by Section
-------
8.05 shall have been taken and completed.
----
(g) Credit and Collection Policies. Comply in all material respects
------------------------------
with its Credit and Collection Policy in regard to each Pool Receivable and
the related Contract.
(h) Collections. Instruct all Obligors to cause all Collections of
-----------
Pool Receivables to be sent directly to a Post Office Box, and deposit all
Collections received into a Designated Account.
SECTION 7.02. Reporting Requirements of the Transferor. From the date
----------------------------------------
hereof until the Final Pay Out Date, the Transferor
- 26 -
will, unless the Agent shall otherwise consent in writing, furnish to the Agent:
(a) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 60 days after the end of each of the first three quarters of
each fiscal year of each of Alco Standard and the Transferor, copies of the
financial statements of the Transferor and its Subsidiaries and Alco
Standard and its Subsidiaries, in each case, prepared on a consolidated
basis, in conformity with generally accepted accounting principles, duly
certified by the chief financial officer, any vice-president, the treasurer
or the controller of the Transferor or Alco Standard, as the case may be;
(b) Annual Financial Statements. As soon as available and in any
---------------------------
event within 90 days after the end of each fiscal year of the Transferor
and Alco Standard, copies of the financial statements of the Transferor and
its Subsidiaries and Alco Standard and its Subsidiaries, in each case
prepared on a consolidated basis, in conformity with generally accepted
accounting principles, duly certified by independent certified public
accountants of recognized standing selected by the Transferor or Alco
Standard, as the case may be;
(c) Reports to Holders and Exchanges. Copies of any reports or
--------------------------------
registration statements that the Transferor or Alco Standard files with the
Securities and Exchange Commission or any national securities exchange
other than registration statements relating to employee benefit plans and
registrations of securities for selling security holders and statements
filed on Form S-1;
(d) ERISA. Promptly after the filing or receiving thereof, copies of
-----
all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA as to which the Pension Benefit Guaranty Corporation
has not waived the 30-day notice requirement which the Transferor or Alco
Standard files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or which the
Transferor or Alco Standard receives from the Pension Benefit Guaranty
Corporation;
(e) Termination Events. As soon as possible and in any event within
------------------
five days after the occurrence of each Termination Event and each Unmatured
Termination Event, a written statement of the chief financial officer or
chief accounting officer of the Transferor setting forth details of such
event and the action that the Transferor proposes to take with respect
thereto;
- 27 -
(f) Litigation. As soon as possible and in any event within three Business
----------
Days of the Transferor's knowledge thereof, notice of (i) any litigation,
investigation or proceeding which may exist at any time which could have a
Material Adverse Effect and (ii) any material adverse development in
previously disclosed litigation; and
(g) Other. Promptly, from time to time, such other information,
-----
documents, records or reports respecting the Receivables or the condition
or operations, financial or otherwise, of the Transferor as the Agent may
from time to time reasonably request in order to protect the interests of
the Agent or the Transferee under or as contemplated by this Agreement.
SECTION 7.03. Negative Covenants of the Transferor. From the date hereof
------------------------------------
until the Final Pay Out Date, the Transferor will not, without the prior written
consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein, sell,
-----------------
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Lien upon or with respect to, any Pool
Receivable or Related Property, or any interest therein, or any post office
box or account to which any Collections of any Pool Receivable are sent, or
any right to receive income from or in respect of any of the foregoing.
(b) Extension or Amendment of Receivables. Except as otherwise
-------------------------------------
permitted in Section 8.02, extend, amend, terminate or otherwise modify the
------------
terms of any Pool Receivable, or amend, modify, terminate or waive any term
or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy. Make any
--------------------------------------------------
change in the character of its business or in the Credit and Collection
Policy, which change would, in either case, impair the collectibility of
the Pool Receivables (other than an immaterial portion thereof) or
otherwise adversely affect the interests, rights or remedies of the
Transferee under this Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. Add or terminate any
------------------------------------------
Post Office Box from those listed in Schedule 6.01(o) or make any change in
----------------
its instructions to Obligors regarding payments to be made to the
Transferor or the Servicer or payments to be made to any Post Office Box
unless the Agent shall have received (i) notice of such addition,
termination or change and (ii) duly executed copies of Post Office Box
Agreements with respect to each
- 28 -
new Post Office Box. Deposit or transfer any Collections received in any
Post Office Box or otherwise to any account other than a Designated
Account.
(e) Mergers, Acquisitions, Sales, etc. Be a party to any merger or
---------------------------------
consolidation, or purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person, or, except in the ordinary course of
its business, sell, transfer, convey or lease all or any substantial part
of its assets, or permit any Subsidiary to do any of the foregoing, except
for any such merger or consolidation, sale, transfer, conveyance, lease or
assignment (i) of or by any wholly-owned Subsidiary into the Transferor or
into, with or to any other wholly-owned Subsidiary, (ii) any such purchase
or other acquisition by the Transferor or any wholly-owned Subsidiary of
the assets or stock of any wholly-owned Subsidiary and (iii) pursuant to
which Transferor is the survivor, provided that no Termination Event or
Unmatured Termination Event has occurred and is continuing or would result
therefrom.
(f) Support Agreement. Amend, modify or terminate the Support
-----------------
Agreement.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. (a) Transferor as Initial
----------------------- ---------------------
Servicer. The servicing, administering and collection of the Pool Receivables
- --------
shall be conducted by the Person designated as the servicer hereunder (the
"Servicer") from time to time in accordance with this Section 8.01. Until the
-------- ------------
Agent gives to the Transferor a notice designating a new Servicer (as provided
in Section 8.01(b)), the Transferor is hereby designated as, and hereby agrees
---------------
to perform the duties and obligations of, the Servicer pursuant to the terms
hereof.
(b) Designation of New Servicer. Upon the Transferor's receipt of a notice
---------------------------
from the Agent of the Agent's designation of a new Servicer, the Transferor
agrees that it will terminate its activities as the Servicer hereunder in a
manner that the Agent believes will facilitate the transition of the performance
of such activities to the new Servicer, and the Agent (or, its designee) shall
assume each and all of the Transferor's said obligations to service and
administer the Pool Receivables, on the terms and subject to the conditions
herein set forth, and the Transferor shall use its best efforts to assist the
Agent (or its designee) in assuming such obligations. The Agent agrees not to
- 29 -
give such notice until after the occurrence of (i) any Termination Event, (ii)
any default by the Servicer of the type described in Section 10.01(a) (whether
----------------
or not the Transferor or an Affiliate of the Transferor is the Servicer), or
(iii) any event which, in the reasonable opinion of the Agent, could have a
material adverse effect on the Transferor's ability to perform its obligations
as the Servicer hereunder, in which case such notice may be given at any time in
the Agent's discretion. If the Transferor disputes the occurrence of a
Termination Event or other event described above, the Transferor may take
appropriate action to resolve such dispute; provided that the Transferor must
--------
terminate its activities hereunder as the Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the Agent
as described above, notwithstanding the commencement or continuation of any
proceeding to resolve the aforementioned dispute.
(c) Subcontracts. The Servicer may, with the prior written consent of the
------------
Agent, subcontract with any other person for servicing, administering or
collecting the Pool Receivables; provided that the Servicer shall remain liable
--------
for the performance of the duties and obligations of the Servicer pursuant to
the terms hereof; and provided, further, that any funds received by any
-------- -------
subcontractor pursuant to the subcontract shall be deemed to have been received
by the Servicer.
SECTION 8.02. Duties of Servicer. (a) Appointment; Duties in General.
------------------ ------------------------------
Each of the Transferor, the Transferee and the Agent hereby appoints as its
agent the Servicer, as from time to time designated pursuant to Section 8.01,
------------
(i) to enforce its rights and interests in and under the Pool Receivables, the
Contracts and other Related Property, (ii) to take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Policy, and (iii) to take such other actions and exercise such other
powers on behalf of the Transferee and the Agent under this Agreement as are
delegated to the Servicer by the terms hereof.
(b) Allocation of Collections; Segregation. The Servicer shall set aside
--------------------------------------
and hold in trust for the account of the Transferor and the Transferee their
respective allocable shares of the Collections of Pool Receivables in accordance
with Sections 3.01 and 3.02, but shall not be required (unless otherwise
------------- ----
requested by the Agent) to segregate the funds constituting such portions of
such Collections prior to the remittance thereof in accordance with said
Sections. If instructed by the Agent, the Servicer shall segregate and deposit
with a bank designated by the Agent such allocable shares of Collections of Pool
Receivables, set aside for the Transferee and
- 30 -
any assignee from the Transferee of the Transferee's Interest (or any portion
thereof), on the first Business Day following receipt by the Servicer of such
Collections in immediately available funds.
(c) Modification of Receivables. So long as no Termination Event or
---------------------------
Unmatured Termination Event shall have occurred and be continuing, the
Transferor, while it is Servicer, may, in accordance with the Credit and
Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of any
Defaulted Receivable as the Transferor may determine to be appropriate to
maximize Collections thereof; provided that, no such extension shall be for more
-------- ----
than 30 days and, after giving effect to such extension of maturity or such
adjustment, the Unadjusted Transferee's Percentage will not exceed the Maximum
Percentage, and (ii) adjust the Unpaid Balance of any Receivable to reflect the
reductions or cancellations described in Section 3.03(a). The Transferee will
---------------
not terminate, nor allow the prepayment of, any Contract related to a Pool
Receivable unless, after giving effect to such termination or prepayment, any
payment of a deemed Collection as a result of such termination or prepayment
pursuant to Section 3.03 and the inclusion of any new Eligible Receivables in
------------
the Receivables Pool, the Unadjusted Transferee's Percentage, as of such date,
does not exceed the Maximum Percentage.
(d) Documents and Records. The Transferor shall deliver to the Servicer,
---------------------
and the Servicer shall hold in trust for the Transferor and the Transferee in
accordance with their respective interests, all documents, instruments and
records (including, without limitation, computer tapes or disks) that evidence
or relate to Pool Receivables.
(e) Power of Attorney. The Transferor hereby grants to the Servicer an
-----------------
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Transferor all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Transferor or transmitted or
received by the Transferee (whether or not from the Transferor) in connection
with any Receivable.
(f) Certain Duties to the Transferor. The Servicer shall, as soon as
--------------------------------
practicable following receipt, turn over to the Transferor (i) that portion of
Collections of Pool Receivables representing its undivided interest therein,
less, the sum of (a) in the event the Transferor is no longer the Servicer, all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer of
servicing, collecting and administering the Pool Receivables to the extent not
covered by the Servicer's Fee received by it and (b) any amounts, other than
Transferee's Investment and Earned Discount, then due to the Transferee or the
- 31 -
Agent, and (ii) the Collections of any Receivable that is not a Pool Receivable.
The Servicer, if other than the Transferor, shall, at the Transferor's expense,
as soon as practicable upon demand, deliver to the Transferor all documents,
instruments and records in its possession that evidence or relate to Receivables
of the Transferor other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
(g) Termination. The Servicer's authorization under this Agreement shall
-----------
terminate on the Final Pay Out Date.
SECTION 8.03. Rights of the Agent. (a) Notice to Obligors; Segregation.
------------------- -------------------------------
At any time the Agent may notify the Obligors of Pool Receivables, or any of
them, of the ownership of the Transferee's Interest by the Transferee. At any
time the Agent may require the Transferor to establish a new Designated Account
into which no funds are deposited other than Collections, and to deposit, or
cause to be deposited, all Collections into such new Designated Account.
(b) Notice to Post Office Boxes and Designated Banks. At any time when a
------------------------------------------------
Termination Event or an Unmatured Termination Event shall have occurred, (i) the
Agent is hereby authorized to give notice, as provided in the Post Office Box
Agreements, of the transfer to the Agent of dominion and control over the Post
Office Boxes to which the Obligors of Pool Receivables make payments, (ii) the
Agent is hereby authorized to give notice to the Designated Account Banks, as
provided in the Designated Account Agreements, of the transfer to the Agent of
dominion and control over the Designated Accounts and (iii) the Agent may
notify, or may require the Servicer to notify, the Obligors to send their
payments to a lock-box located at DBNY or other bank approved by the Agent,
under the dominion and control of the Agent.
(c) Rights on Designation of New Servicer. At any time following the
-------------------------------------
designation of a Servicer other than the Transferor pursuant to Section 8.01:
------------
(i) The Agent may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to the
Agent or its designee.
(ii) The Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of such ownership to each said Obligor
and direct that payments be made directly to the Agent or its designee.
- 32 -
(iii) The Transferor shall, at the Agent's request, (A) assemble all
of the documents, instruments and other records (including, without
limitation, computer programs, tapes and disks) which evidence the Pool
Receivables and Related Property, or which are otherwise necessary or
desirable to collect such Pool Receivables, and make the same available to
the Agent at a place selected by the Agent or its designee, and (B)
segregate all cash, checks and other instruments received by it from time
to time constituting Collections of Pool Receivables in a manner acceptable
to the Agent and shall, promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments of
transfer, to the Agent or its designee.
(d) Authorization and Power of Attorney. Each of the Transferor and the
-----------------------------------
Transferee hereby authorizes the Agent and hereby appoints the Agent as its
attorney-in-fact (which appointment is coupled with an interest and is
irrevocable), from time to time upon and after the designation of a successor
Servicer in accordance with Section 8.01, to take any and all steps in the
------------
Transferor's name and on behalf of the Transferor and the Transferee which are
necessary or desirable, in the determination of the Agent, to collect all
amounts due under any and all Pool Receivables and Related Property, including,
without limitation, endorsing the Transferor's name on checks and other
instruments representing Collections and enforcing such Pool Receivables and the
related Contracts.
SECTION 8.04. Responsibilities of Transferor. Anything herein to the
------------------------------
contrary notwithstanding:
(a) The Transferor shall perform all of its obligations under the
Contracts related to the Pool Receivables and under the related purchase
orders and other agreements to the same extent as if the Transferee's
Interest had not been transferred hereunder and the exercise by the Agent
of its rights hereunder shall not relieve the Transferor from such
obligations.
(b) Neither the Agent nor the Transferee shall have any obligation or
liability with respect to any Pool Receivables, Contracts related thereto
or any other related purchase orders or other agreements, nor shall any of
them be obligated to perform any of the obligations of the Transferor
thereunder.
SECTION 8.05. Further Action Evidencing Transfers. (a) The Transferor
-----------------------------------
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the
- 33 -
Agent may reasonably request in order to perfect, protect or more fully evidence
the Transfers hereunder and the resulting Transferee's Interest, or to enable
the Transferee or the Agent to exercise or enforce any of their respective
rights hereunder or under the other Transaction Documents. Without limiting the
generality of the foregoing, the Transferor will upon the request of the Agent:
(i) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate;
(ii) mark conspicuously each Contract evidencing each Pool Receivable
with a legend, acceptable to the Agent, evidencing the transfer of the
Transferee's Interest; and
(iii) mark its master data processing records evidencing such Pool
Receivables and related Contracts with such legend.
(b) The Transferor hereby authorizes the Agent to file in the name of the
Transferor, to the extent permitted by applicable law, one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and Related Property now existing
or hereafter arising. If the Transferor fails to perform any of its agreements
or obligations under this Agreement, the Agent may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the expenses of the Agent incurred in connection therewith shall be payable by
the Transferor as provided in Section 13.01.
-------------
(c) Without limiting the generality of subsection (a), the Transferor will,
--------------
not earlier than six (6) months and not later than three (3) months from the
fifth anniversary of the date of filing of the financing statements referred to
in Sections 5.01(f) and 5.01(k) or any other financing statement filed pursuant
---------------- -------
to this Agreement or in connection with any Transfer hereunder, unless the Final
Pay Out Date shall have occurred:
(i) execute and deliver and file or cause to be filed an appropriate
continuation statement with respect to each such financing statement; and
(ii) deliver or cause to be delivered to the Agent an opinion of the
counsel for the Transferor referred to in Section 5.01(i) (or other counsel
---------------
for the Transferor reasonably satisfactory to the Agent), in form and
substance reasonably satisfactory to the Agent, confirming and
- 34 -
updating the opinion delivered pursuant to Section 5.01(i) with respect to
---------------
the matters set forth in paragraph no. [7] of Exhibit 5.01(i) and otherwise
---------------
to the effect that the Transferee's Interest hereunder continues to be a
valid and perfected interest subject to no Liens of record except as
provided herein or otherwise permitted hereunder.
SECTION 8.06. Application of Obligors' Payments. (a) Any payment by an
---------------------------------
Obligor in respect of any indebtedness owed by it to the Transferor shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless the Agent instructs otherwise, be applied as a Collection of
any Pool Receivable or Receivables of such Obligor to the extent of any amounts
then due and payable thereunder before such payment is applied to any other
indebtedness of such Obligor.
(b) Except or as otherwise required by law or the underlying Contract, all
Collections received from an Obligor of any Receivable shall be applied to Pool
Receivables then outstanding of such Obligor in the order of the age of such
Pool Receivables, starting with the oldest such Pool Receivable; provided,
--------
however, that, if payment is designated by such Obligor for application to
- -------
specific Receivables, it shall be applied to such specified Receivables.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations of
--------------------------
the Transferor arising in connection with this Agreement and each other
Transaction Document, whether now or hereafter existing, due or to become due,
direct or indirect, or absolute or contingent, including, without limitation,
Indemnified Amounts, payments on account of Collections received or deemed to be
received, fees and Earned Discount, in each case pro rata according to the
--- ----
respective amounts thereof, the Transferor hereby assigns and grants to the
Transferee, for its benefit and the benefit of the Agent, the Affected Parties
and the Indemnified Parties, a security interest in all of the Transferor's
right, title and interest (including specifically any undivided interest
retained by the Transferor hereunder) now or hereafter existing in, to and under
all the Pool Receivables and Related Property.
SECTION 9.02. Further Assurances. The provisions of Section 8.05 shall
------------------ ------------
apply to the security interest granted under Section 9.01 as well as to the
------------
Transfers and the Transferee's Interest hereunder.
- 35 -
SECTION 9.03. Remedies. Upon the occurrence of a Termination Event, the
--------
Transferee, for its own benefit and for the benefit of the Agent, the Affected
Parties and the Indemnified Parties, shall have, with respect to the collateral
granted pursuant to Section 9.01, and in addition to all other rights and
------------
remedies available to the Transferee, the Agent, the Affected Parties or the
Indemnified Parties under this Agreement or other applicable law, all the rights
and remedies of a secured party upon default under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01. Termination Events. Each of the following events shall be
------------------
a "Termination Event":
-----------------
(a) (i) The Servicer (if the Transferor or an Affiliate of the
Transferor is the Servicer) shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (ii)
-----------
next following) and such failure shall remain unremedied for three Business
Days or (ii) the Servicer (if the Transferor or an Affiliate of the
Transferor is the Servicer) or the Transferor shall fail to make any
payment or deposit to be made by it hereunder when due; or
(b) Any representation or warranty made or deemed to be made by the
Transferor (or any of its officers) under or in connection with this
Agreement or any Periodic Report or Pay Out Statement or other information
or report delivered pursuant hereto shall prove to have been false or
incorrect in any material respect when made; or
(c) The Transferor shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten
Business Days after written notice thereof shall have been given by the
Agent to the Transferor; or
(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance
of indebtedness for borrowed money of, or guaranteed by, the Transferor or
any Affiliate thereof (provided, that in the case of Alco Standard, such
indebtedness is in excess of $5,000,000), which default is a payment
default or if unremedied, uncured, or unwaived (with or without the passage
of time or the giving of notice or both) would permit acceleration of the
maturity of such
- 36 -
indebtedness and such default shall have continued unremedied, uncured or
unwaived for a period long enough to permit such acceleration and any
notice of default required to permit acceleration shall have been given; or
any default under any agreement or instrument relating to the purchase or
transfer of receivables of the Transferor, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default is to
terminate, or permit the termination of, the commitment of any party to
such agreement or instrument to purchase or acquire receivables or the
right of the Transferor to reinvest in receivables the principal amount
paid by any party to such agreement or instrument for an interest in
receivables; or
(e) An Event of Bankruptcy shall have occurred and remained continuing
with respect to the Transferor or any Affiliate thereof; or
(f) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed
in writing by the Transferor to the Agent and the Transferee prior to the
date of execution and delivery of this Agreement is pending against the
Transferor or any Affiliate thereof, or (ii) any material development not
so disclosed has occurred in any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the opinion of the
---------- ----
Agent, is likely to have a Material Adverse Effect; or
(g) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
assets of the Transferor and such lien shall not have been released within
5 days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068
of the Employee Retirement Income Security Act of 1974 with regard to any
of the assets of the Transferor or Alco Standard; or
(h) There shall have occurred or shall exist any event or condition
which has, or would have a material possibility of causing, a Material
Adverse Effect; or the warranty in Section 6.01(i)(y) shall not be true at
------------------
any time; or
(i) the Unadjusted Transferee's Percentage shall exceed the Maximum
Percentage, and such event shall continue for more than 5 Business Days; or
- 37 -
(j) The Losses to Liquidations Ratio (1) for any one month period
exceeds 9% or (2) for any six consecutive month period exceeds 7.5%; or
(k) The Delinquency Ratio exceeds 4% or the Default Ratio exceeds 3%;
or
(l) a default shall occur under the Support Agreement, or the Support
Agreement shall terminate or cease to be in effect for any reason; or
(m) There shall have been entered against the Transferor one or more
judgments, awards or decrees which exceed $2,500,000 at any one time
outstanding, excluding judgments, awards or decrees for which there is full
insurance and with respect to which the insurer has assumed a
responsibility in writing; or
(n) Transferor ceases to have a long term unsecured debt rating of at
least BBB- from S&P and Baa3 from Moody's; or
(o) Transferee shall cease to have a valid, perfected first priority
ownership interest in the Receivables and the Related Property for any
reason.
SECTION 10.02. Remedies. (a) Optional Termination. Upon the occurrence
-------- --------------------
of a Termination Event (other than a Termination Event described in subsection
----------
(e) or (i) of Section 10.01), the Agent shall, at the request, or may with the
- --- --- -------------
consent, of the Transferee, by notice to the Transferor declare the Commitment
Termination Date to have occurred.
(b) Automatic Termination. Upon the occurrence of a Termination Event
---------------------
described in subsection (e) or (i) of Section 10.01, the Commitment Termination
-------------- --- -------------
Date shall be deemed to have occurred automatically upon the occurrence of such
event; provided that, if the Commitment Termination Date shall have occurred by
--------
reason of a Termination Event described in subsection (i) and subsequent to such
--------------
date the Unadjusted Transferee's Percentage shall not exceed the Maximum
Percentage, upon written notice by the Agent to the Transferor, the Commitment
shall be reinstated.
(c) Additional Remedies. Upon any termination of the Commitment pursuant
-------------------
to this Section 10.02, the Agent and the Transferee shall have, in addition to
-------------
all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other applicable laws, which rights shall be cumulative. Without limiting the
foregoing or the general applicability of
- 38 -
Article XIII hereof, (i) the occurrence of a Termination Event shall not deny to
- ------------
the Transferee any remedy in addition to termination of the Commitment to which
the Transferee may be otherwise appropriately entitled, whether at law or in
equity, and (ii) following the occurrence of any Termination Event the
Transferee may elect to assign to any Person the Transferee's Interest, or any
portion thereof.
ARTICLE XI
THE AGENT
SECTION 11.01. Authorization and Action. The Transferee has appointed the
------------------------
Agent as its agent pursuant to a Servicing Agreement between the Transferee and
DBNY, and hereby authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the Agent
by the terms hereof and of said Servicing Agreement, together with such powers
as are reasonably incidental thereto.
SECTION 11.02. Agent's Reliance, Etc. Neither the Agent nor any of its
---------------------
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or the Agent under or in connection with this
Agreement (including, without limitation, the servicing, administering or
collecting Pool Receivables as the Servicer pursuant to Section 8.01), except
------------
for its or their own gross negligence or willful misconduct, and except for any
breach by the Servicing Agent of its obligations to the Transferee expressly set
forth in the Servicing Agreement referred to in Section 11.01. Without limiting
-------------
the generality of the foregoing, the Agent: (a) may consult with legal counsel
(including counsel for the Transferor), independent certified public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or representation to the
Transferee or any other holder of any interest in Pool Receivables and shall not
be responsible to the Transferee or any such other holder for any statements,
warranties or representations made by any Person (other than the Servicing
Agent) in or in connection with this Agreement; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Transferor or to
inspect the property (including the books and records) of the Transferor, except
for its duties to the Transferee as set forth in the Servicing Agreement
referred to above; (d) shall not be responsible to the Transferee (except for
any breach by the Servicing Agent of its duties set forth in the Servicing
Agreement referred to above) or to any other holder of
- 39 -
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Transaction Document; and (e) shall incur no liability under or in respect of
this Agreement by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by facsimile
or telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 11.03. Agent and Affiliates. Deutsche Bank and its Affiliates may
--------------------
generally engage in any kind of business with the Transferor or any Obligor, any
of their respective Affiliates and any Person who may do business with or own
securities of the Transferor or any Obligor or any of their respective
Affiliates, all as if Deutsche Bank were not the Agent and without any duty to
account therefor to the Transferee or any other holder of an interest in Pool
Receivables.
ARTICLE XII
ASSIGNMENTS BY TRANSFEROR OR TRANSFEREE
SECTION 12.01. Restrictions on Assignments. (a) Neither the Transferor
---------------------------
nor the Transferee may assign its rights hereunder or any interest herein
without the prior written consent of the Agent, and the Transferee may not
assign the Transferee's Interest (or any portion thereof) to any Person without
the prior written consent of the Transferor; provided, however, that
-------- -------
(i) the Transferee may assign, or grant a security interest in, the
Transferee's Interest (or any portion thereof) to Deutsche Bank, the
Liquidity Banks (or any successor of any thereof by merger, consolidation
or otherwise), or any Affiliate of Deutsche Bank or any of the Liquidity
Banks (which may then assign the Transferee's Interest (or any portion
thereof so assigned) or any interest therein to such party or parties as it
may choose); and
(ii) the Transferee may assign and grant a security interest in the
Transferee's Interest and the Transferee's rights and interests in, to and
under this Agreement and the other Transaction Documents to DBNY, as
Collateral Agent, and any successor in such capacity, to secure the
Transferee's obligations under or in connection with the Commercial Paper
Notes, the Liquidity Agreement, the Enhancement Agreement and any letter of
credit issued thereunder, and certain other obligations of the Transferee
incurred in connection with the funding of the Transfers and Reinvestments
hereunder, which assignment and grant of a
- 40 -
security interest shall not be considered an "assignment" for purposes of
Section 12.01(b), Section 12.03 or 12.04 or, prior to the enforcement of
---------------- ------------- -----
such security interest, for purposes of any other provision of this
Agreement.
(b) The Transferor agrees to advise the Agent within five Business Days
after notice to the Transferor of any proposed assignment by the Transferee of
the Transferee's Interest (or any portion thereof), not otherwise permitted
under subsection (a), of the Transferor's consent or non-consent to such
--------------
assignment. If the Transferor does not consent to such assignment, the
Transferee may immediately assign the Transferee's Interest (or such portion) to
Deutsche Bank, any of the Liquidity Banks or any Affiliate of Deutsche Bank or
any of the Liquidity Banks. All of the aforementioned assignments shall be upon
such terms and conditions as the Transferee and the assignee may mutually agree.
SECTION 12.02. Documentation; Notice of Assignment. (a) Any assignment of
-----------------------------------
the Transferee's Interest (or any portion thereof) to any Person may be
evidenced by such instruments or documents as may be satisfactory to the
Transferee, the Agent and the assignee.
(b) The Transferee shall provide notice to the Transferor of any
assignment of the Transferee's Interest (or any portion thereof) by the
Transferee to any assignee (other than the assignment and grant of a security
interest referred to in Section 12.01(a)(ii)).
--------------------
SECTION 12.03. Rights of Assignee. Upon the assignment by the Transferee
------------------
of the Transferee's Interest (or any portion thereof) in accordance with this
Article XII, the assignee receiving such assignment shall have all of the rights
- -----------
of the Transferee hereunder with respect to the Transferee's Interest (or the
portion thereof so assigned); subject, however, to Sections 12.04 and 12.05.
------- ------- -------------- -----
SECTION 12.04. Allocation of Payments. If on any date there are sufficient
----------------------
funds in the Agent's Account to distribute a portion, but not all, of the
amounts payable pursuant to subsection (c)(i) of either Section 3.01 or Section
----------------- ------------ -------
3.02 and, due to any assignment of the Transferee's Interest (or any portion
- ----
thereof), such amounts are payable to more than one Person, then, unless
otherwise agreed between such Persons, and subject to Section 3.02(d), the Agent
---------------
shall distribute funds to such Persons pro rata based upon the amounts so
--- ----
payable to such Persons.
SECTION 12.05. Calculation of Earned Discount After Assignment. Upon
-----------------------------------------------
and after the assignment of the Transferee's Interest (or any portion thereof)
pursuant to this Article XII, the Transferee Rate used to calculate Earned
-----------
Discount from time
- 41 -
to time with respect to the Transferee's Interest (or the portion thereof so
assigned) for each applicable Yield Period beginning after the effective date of
such assignment shall be the Bank Rate, unless the Transferee, the Transferor
and the assignee may agree in writing upon to use a different Transferee Rate
for calculating such Earned Discount. If (i) the Transferor fails to consent to
any assignment of the Transferee's Interest (or any portion thereof) proposed by
the Transferee, (ii) the Transferee makes an assignment of the Transferee's
Interest (or such portion) to Deutsche Bank or any Affiliate of Deutsche Bank as
permitted under Section 12.01(b), and (iii) in the opinion of the Agent, the
----------------
Transferee was required by applicable law, regulation or directive from any
governmental authority to make such assignment, then the Earned Discount with
respect to the Transferee's Interest (or the portion thereof so assigned) shall
immediately begin to accrue at the Bank Rate for the remainder of any then
applicable Yield Period.
SECTION 12.06. Rights of Collateral Agent. The Transferor hereby agrees
--------------------------
that, upon notice to the Transferor, the Collateral Agent referred to in Section
-------
12.01 may exercise all the rights of the Agent hereunder with respect to the
- -----
Transferee's Interest (or all portions thereof, and Collections with respect
thereto, which are owned by the Transferee), and all other rights and interests
of the Transferee in, to or under this Agreement or any other Transaction
Document. Without limiting the foregoing, upon such notice such Collateral
Agent may request the Servicer to segregate the Transferee's allocable share of
Collections from the Transferor's allocable share in accordance with Section
-------
8.02(a), may give a notice designating a new Servicer pursuant to Section
- ------- -------
8.01(a), may give or require the Agent to give notice to the Post Office Boxes
- -------
and Designated Account Banks as referred to in Section 8.03(a), and may direct
---------------
the Obligors of Pool Receivables to make payments in respect thereof directly to
an account or lockbox designated by it, in each case, to the same extent as the
Transferee or the Agent might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by the Transferor. (a) General Indemnity.
----------------------------- -----------------
Without limiting any other rights which any such Person may have hereunder or
under applicable law, the Transferor hereby agrees to indemnify each of the
Agent, the Transferee, the Liquidity Banks, the Enhancement Bank, Deutsche Bank,
each of their respective Affiliates, successors, transferees, participants and
assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an "Indemnified Party"),
-----------------
forthwith on demand,
- 42 -
from and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys' fees and disbursements (all
of the foregoing being collectively referred to as "Indemnified Amounts")
-------------------
awarded against or incurred by any of them arising out of or relating to this
Agreement or the ownership or funding of the Transferee's Interest (or any
portion thereof) or in respect of any Receivable or any Contract, excluding,
---------
however, (a) Indemnified Amounts to the extent resulting from gross negligence
- -------
or willful misconduct on the part of the Agent, the Transferee or such
Indemnified Party or (b) recourse (except as otherwise specifically provided in
this Agreement) for Defaulted Receivables. Without limiting the foregoing, and
subject to the foregoing exclusions, the Transferor shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by the Transferor of any interest in any Receivable
other than the transfer of the Transferee's Interest to the Transferee
pursuant to this Agreement and the grant of a security interest to the
Transferee pursuant to Section 9.01;
------------
(ii) the breach of any representation or warranty made by the
Transferor (or any of its officers) or the Servicer (if the Transferor or
an Affiliate of the Transferor is the Servicer) under or in connection with
this Agreement, any Periodic Report or Pay Out Statement or any other
information or report delivered by the Transferor or the Servicer pursuant
hereto, which shall have been false or incorrect in any material respect
when made or deemed made;
(iii) the failure by the Transferor or the Servicer (if the
Transferor or an Affiliate of the Transferor is the Servicer) to comply
with any applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract, or the nonconformity of any Pool
Receivable or the related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest and maintain vested in the Transferee an
undivided percentage ownership interest, to the extent of the Transferee's
Interest, in the Receivables in, or purporting to be in, the Receivables
Pool, together with all Related Property, free and clear of any Lien, other
than an Lien arising solely as a result of an act of the Transferee or the
Agent, whether existing at the time of any Transfer or Reinvestment or at
any time thereafter;
(v) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or
- 43 -
other applicable laws with respect to any Pool Receivables or Related
Property, whether at the time of any Transfer or Reinvestment or at any
time thereafter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including, without limitation, a
defense based on such Receivable's or the related Contract's not being a
legal, valid and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim resulting from the sale
of the merchandise or services related to such Receivable or the furnishing
or failure to furnish such merchandise or services;
(vii) any failure of the Transferor, as the Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VIII;
------------
(viii) any products liability claim arising out of or in connection
with merchandise or services that are the subject of any Pool Receivable;
or
(ix) any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same,
which may arise by reason of the transfer or ownership of the Transferee's
Interest, any portion thereof or any other interest in the Pool Receivables
or Related Property or in any goods which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
-------------------------------------
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from the Transferor under
Section 13.01(a)(ix), such Indemnified Party shall give prompt and timely notice
- --------------------
of such attempt to the Transferor and the Transferor shall have the right, at
its expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes and the receipt
of the indemnity provided hereunder or of any refund of any such tax previously
indemnified hereunder, including the effect of such tax or refund on the amount
of tax measured by net income or profits which is or was payable by the
Indemnified Party.
- 44 -
(c) Contribution. If for any reason the indemnification provided above in
------------
this Section 13.01 is unavailable to an Indemnified Party or is insufficient to
-------------
hold an Indemnified Party harmless, then the Transferor shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on the one hand
and the Transferor on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement nor consent to any departure by the Transferor therefrom shall in
any event be effective unless the same shall be in writing and signed by (a) the
Transferor, the Agent and the Transferee (with respect to an amendment) or (b)
the Agent and the Transferee (with respect to a waiver or consent by them) or
the Transferor (with respect to a waiver or consent by it), as the case may be,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 14.02. Notices, Etc. All notices and other communications provided
------------
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier, or by certified mail, postage prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth in
Schedule 14.02 hereto or at such other address or facsimile number as shall be
- --------------
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered
or sent by express mail or courier, when received, (b) if sent by certified
mail, three Business Days after having been deposited in the mail, postage
prepaid, and (c) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means, except that notices and communications pursuant
to Article I shall not be effective until received.
---------
SECTION 14.03. No Waiver; Remedies. No failure on the part of the Agent,
-------------------
any Affected Party, any Indemnified Party, the Transferee or any assignee of the
Transferee's Interest or any portion thereof to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other
- 45 -
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Without limiting the foregoing, Deutsche Bank is
hereby authorized by the Transferor at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Deutsche Bank to or for the credit or
the account of the Transferor, now or hereafter existing under this Agreement,
to the Agent, any Affected Party, any Indemnified Party or the Transferee, or
their respective successors and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement shall be binding
------------------------
upon and inure to the benefit of the Transferor, the Agent, the Transferee and
their respective successors and assigns, and the provisions of Section 4.04 and
------------
Article XIII shall inure to the benefit of the Affected Parties and the
- ------------
Indemnified Parties, respectively, and their respective successors and assigns;
provided, however, nothing in the foregoing shall be deemed to authorize any
- -------- -------
assignment not permitted by Section 12.01. This Agreement shall create and
-------------
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time as the
Final Pay Out Date shall have occurred. The rights and remedies with respect to
any breach of any representation and warranty made by the Transferor pursuant to
Article VI and the provisions of Article XIII, Section 4.04 and Sections 14.05
- ---------- ------------ ------------ --------------
through 14.09 shall be continuing and shall survive any termination of this
-----
Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to its obligations
-------------------------
under Article XIII, the Transferor agrees to pay on demand:
------------
(a) all costs and expenses incurred by the Agent, the Transferee,
Deutsche Bank and their respective Affiliates in connection with the
negotiation, preparation, execution and delivery, the administration
(including periodic auditing) or the enforcement of, or any actual or
claimed breach of, this Agreement and the other Transaction Documents,
including, without limitation (i) the reasonable fees and expenses of
counsel to any of such Persons incurred in connection with any of the
foregoing or in advising such Persons as to their respective rights and
remedies under any of the Transaction Documents, and (ii) all reasonable
out-of-pocket expenses (including reasonable fees and expenses of
independent accountants) incurred in connection with any review of the
Transferor's books and records either prior to the execution and delivery
hereof or pursuant to Section 7.01(c);
---------------
- 46 -
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement or any or the other Transaction Documents (and the
Transferor agrees to indemnify each Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees); and
(c) a pro rata share of Transferee's general operating costs and
expenses, including, but not limited to, rating agency fees, management
fees and the fees and expenses of counsel, which pro rata share shall be
determined by dividing the daily average annual Transferee's Investment by
the daily average Commercial Paper Notes issued by Transferee, provided,
--------
however, that in no event shall such pro rata share exceed .01% per annum
-------
of the average annual Transferee's Investment. Such fee shall be payable
on the last day of each February for the calendar year ending on the
immediately preceding December 31.
SECTION 14.06. No Proceedings. The Transferor and Deutsche Bank,
--------------
individually and as Agent, each hereby agrees that it will not institute against
or join any other Person in instituting against, the Transferee, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any Federal or state bankruptcy or similar law, for one year
and a day after the latest maturing Commercial Paper Note is paid. The
foregoing shall not limit the Transferor's right to file any claim in or
otherwise take any action with respect to any insolvency proceeding that was
instituted by any Person other than the Transferor.
SECTION 14.07. Confidentiality of Transferor Information. (a)
-----------------------------------------
Confidential Information. Each of the Transferee and the Agent acknowledges
- -------------------------
that certain of the information provided to such party by or on behalf of the
Transferor in connection with this Agreement and the transactions contemplated
hereby is or may be confidential, and each such party severally agrees that,
unless the Transferor shall otherwise agree in writing, and except as provided
in subsection (b), such party will not disclose to any other person or entity:
--------------
(i) any information regarding, or copies of, any Periodic Reports,
Pay Out Statements, and any non-public financial statements, reports and
other information, furnished by the Transferor to the Transferee or the
Agent pursuant to this Agreement, or
(ii) any other information regarding the Transferor which is
designated by the Transferor to such party in writing or otherwise as
confidential;
- 47 -
the information referred to in clauses (i) and (ii) above, is collectively
--------------------
referred to as the "Transferor Information"; provided, however, "Transferor
---------------------- -------- ------- ----------
Information" shall not include
- -----------
(A) any information which is or becomes generally available to
the general public or to such party on a nonconfidential basis from a
source other than the Transferor or which was known to such party on a
nonconfidential basis prior to its disclosure by the Transferor, or
(B) general information regarding the nature of this Agreement,
the basic terms hereof (including without limitation the amount and
nature of the Commitment and the Transferee's Investments hereunder
and of the recourse or other credit enhancement provided by
hereunder), the nature, amount and status of the Pool Receivables, and
the current and/or historical ratios of losses to liquidations and/or
outstandings with respect to the Receivables Pool, and the identity of
the Transferor.
(b) Disclosure. Notwithstanding subsection (a), each party may disclose
---------- --------------
any Transferor Information:
(i) to any of such party's attorneys, consultants and auditors, and
to such of the Liquidity Banks, the Enhancement Bank, any dealer or
placement agent for the Transferee's commercial paper, and any actual or
potential assignees of, or participants in, any of the rights or
obligations of the Transferee, the Liquidity Banks, the Enhancement Bank or
Deutsche Bank under or in connection with this Agreement, who (A) are
informed by such party of the confidential nature of the Transferor
Information and the terms of this Section 14.07, and (B) are subject to
-------------
confidentiality restrictions generally consistent with this Section 14.07,
-------------
(ii) to any rating agency that maintains a rating for the
Transferee's commercial paper or is considering the issuance of such a
rating, for the purposes of reviewing the credit of the Transferee in
connection with such rating,
(iii) to any other party to this Agreement, for the purposes
contemplated hereby,
(iv) to any Person whom any dealer or placement agent for the
Transferee shall have identified as an actual or potential investor in
Commercial Paper Notes, and who shall have agreed with Deutsche Bank in
writing to keep such information confidential and use it only in connection
with
- 48 -
considering or monitoring such investments, subject to applicable legal
requirements (it being understood that such Person may also receive the
information excluded from the definition of "Transferor Information"
pursuant to clause (B) of subsection (a)),
---------- --------------
(v) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party, or
(vi) subject to subsection (c), in the event such party is legally
--------------
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Transferor Information.
(c) Legal Compulsion. In the event that any party hereto (other than the
----------------
Transferor) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Transferor
Information, such party will (or will cause its representatives to)
(i) provide the Transferor with prompt written notice of such request
or legal compulsion; and
(ii) at the Transferor's expense, use its reasonable efforts to
cooperate with the Transferor in making an appropriate objection to
disclosure, seeking a protective order or taking such other actions as may
be lawful and appropriate in order to maintain the confidentiality of such
Transferor Information.
(d) Survival. This Section 14.07 shall survive termination of this
-------- -------------
Agreement.
SECTION 14.08. Confidentiality of Program Information. (a) Program
-------------------------------------- -------
Information. Each party hereto (other than DBNY) acknowledges that DBNY regards
- -----------
the structure of the transactions contemplated by this Agreement, and by the
Liquidity Agreement, the Enhancement Agreement and the other Program Documents
referred to therein, to be proprietary, and each such party severally agrees
that:
(i) unless DBNY shall otherwise agree in writing, and except as
provided in subsection (b), such party will not disclose to any other
--------------
person or entity:
- 49 -
(A) any information regarding, or copies of, this Agreement or
any transaction contemplated hereby,
(B) any information regarding, or copies of, the Liquidity
Agreement, the Enhancement Agreement, any of the other Program
Documents referred to therein, or any transaction contemplated
thereby,
(C) any information regarding the organization or business of
the Transferee generally, or
(D) any information regarding Deutsche Bank which is designated
by DBNY to such party in writing or otherwise as confidential or not
otherwise available to the general public
(the information referred to in clauses (A), (B), (C) and
----------- --- ---
(D) above, whether furnished by the Transferee, DBNY, any Liquidity Bank, the
- ---
Enhancement Bank, any assignee of or participant in any rights or obligations of
the Transferee, any Liquidity Bank or the Enhancement Bank, or any attorney for
or other representative of any of the foregoing (each a "Program Information
-------------------
Provider"), is collectively referred to as the "Program Information"; provided,
- -------- ------------------- --------
however, "Program Information" shall not include any information which is or
- ------- -------------------
becomes generally available to the general public or to such party on a
nonconfidential basis from a source other than DBNY or any other Program
Information Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by DBNY or any other Program Information
Provider);
(ii) such party will make the Program Information available to only
such of its officers, directors, employees and agents who (A) in the good
faith belief of such party, have a need to know such Program Information,
(B) are informed by such party of the confidential nature of the Program
Information and the terms of this Section 14.08, and (C) are subject to
-------------
confidentiality restrictions consistent with this Section 14.08;
-------------
(iii) such party will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business judgments
with respect thereto; and
(iv) such party will, upon demand, return (and cause each of its
officers, directors, employees, agents, attorneys, consultants or auditors
(collectively, "representatives") to return) to DBNY, or to such other
---------------
Program Information Provider as shall have furnished it with
- 50 -
any Program Information, all documents or other written material received
from DBNY or such other Program Information Provider which constitute or
contain any Information described in subclause (B), (C), or (D) of clause
------------- --- --- ------
(i) above and all copies of such documents or other material in its
---
possession or in the possession of any of its representatives, and will not
retain any copy, summary or extract thereof on any storage medium
whatsoever.
(b) Disclosure. Notwithstanding clause (i) of subsection (a), each party
---------- ---------- --------------
may disclose any Program Information:
(i) to its attorneys, consultants and auditors who (A) in the good
faith belief of such party, have a need to know such Program Information,
(B) are informed by such party of the confidential nature of the Program
Information and the terms of this Section 14.08, and (C) are subject to
-------------
confidentiality restrictions consistent with this Section 14.08,
-------------
(ii) to any other party to this Agreement, for the purposes
contemplated hereby,
(iii) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party (provided that prior to making any required
--------
filing of this agreement with the Securities and Exchange Commission,
Transferor shall apply for confidential treatment and shall expurgate those
provisions requested by the Agent), or
(iv) subject to subsection (c), in the event such party is legally
--------------
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Program Information.
(c) Legal Compulsion. In the event that any party hereto (other than
----------------
DBNY) or any one to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will (or
will cause its representatives to)
(i) provide DBNY with prompt written notice of such request or legal
compulsion;
(ii) unless DBNY agrees that such Program Information may be
disclosed, make a timely objection to the request or
- 51 -
compulsion to provide such Program Information on the basis that such
Program Information is confidential and subject to the agreements contained
in this Section 14.08; and
-------------
(iii) at the expense of DBNY or any other Program Information
Provider, take any action as DBNY or such other Program Information
Provider may reasonably request to seek a protective order or other
appropriate remedy and otherwise to maintain the confidentiality of such
Program Information.
(d) Survival. This Section 14.08 shall survive termination of this
-------- -------------
Agreement.
SECTION 14.09. No Recourse Against Other Parties. No recourse under any
---------------------------------
obligation, covenant or agreement of the Transferee contained in this Agreement
shall be had against any stockholder, employee, officer, director, or
incorporator of the Transferee, provided, however, that nothing in this Section
-------- ------- -------
14.09 shall relieve any of the foregoing Persons from any liability which such
- -----
Person may otherwise have for such Person's gross negligence or willful
misconduct.
SECTION 14.10. Definitions; Other Terms. Unless otherwise defined herein,
------------------------
all capitalized terms used in this Agreement shall have the meanings set forth
in Appendix A attached to this Agreement and by this reference made a part
----------
hereof. All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 14.11. Captions and Cross References. The various captions
-----------------------------
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
SECTION 14.12. Integration. This Agreement contains a final and complete
-----------
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
- 52 -
SECTION 14.13. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
-------------
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION (AND THE EFFECT OF PERFECTION OR NONPERFECTION) OF THE INTERESTS OF
THE TRANSFEREE IN THE RECEIVABLES OR THE RELATED PROPERTY IS GOVERNED BY THE
LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.14. Waiver Of Jury Trial. THE TRANSFEROR HEREBY EXPRESSLY
--------------------
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY.
SECTION 14.15. Consent To Jurisdiction; Waiver Of Immunities. EACH OF THE
---------------------------------------------
TRANSFEROR AND TRANSFEREE HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK
CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.16. Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
- 53 -
SECTION 14.17. Syndication of Liquidity. The Transferor agrees to
------------------------
cooperate with DBNY in connection with the syndication of the Liquidity
Agreement.
SECTION 14.18. Tax Treatment. It is the intent of Transferor and
-------------
Transferee that, for federal, state and local income and franchise tax purposes,
the Transferee's Interest will be treated as evidence of indebtedness secured by
the Receivables, Related Security and Collections and other proceeds thereof.
Transferor, by entering into this Agreement, and Transferee agree to treat the
Transferee's Interest for federal, state and local income and franchise tax
purposes as indebtedness. The provisions of this Agreement and all related
Transaction Documents shall be construed to further such intentions of the
parties.
- 54 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
TWIN TOWERS INC.,
as Transferee
By
---------------------------------------
Name Printed: Lannhi Tran
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Agent
By
---------------------------------------
Name Printed: Robert M. Lupoli
Title: Director
By
---------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
ALCO CAPITAL RESOURCE, INC.
as Transferor and initial Servicer
By
---------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Transfer Agreement, dated as of
----------
September 23, 1994, among Alco Capital Resource, Inc., Twin Towers Inc. and
Deutsche Bank AG, New York Branch, as Agent (as amended, supplemented or
otherwise modified from time to time, this "Agreement"). Each reference in this
---------
Appendix A to any Section, Appendix or Exhibit refers to such Section of or
- ----------
Appendix or Exhibit to this Agreement.
As used in this Agreement, unless the context requires a different meaning,
the following terms have the meanings indicated hereinbelow:
"Adjusted Average Maturity" means, on any day, the sum of (a) 45 days plus
------------------------- --- ----
(b) the Average Maturity for such day.
"Affected Party" means each of the Transferee, the Liquidity Banks, the
--------------
Enhancement Bank, any permitted assignee of the Transferee, any assignee of or
participant in any of the Transferee's obligations to the Liquidity Banks or the
Enhancement Bank, Deutsche Bank (including any branch or agency thereof) and any
successor to Deutsche Bank or DBNY as the Agent.
"Affiliate" when used with respect to a Person means any other Person
---------
controlling, controlled by, or under common control with, such Person.
"Agent" has the meaning set forth in the preamble.
----- --------
"Agent's Account" has the meaning set forth in Section 4.01(a).
--------------- ---------------
"Alco Standard" means Alco Standard Corporation, an Ohio corporation.
-------------
"Alternate Base Rate" means, on any date, a fluctuating rate of interest
-------------------
per annum equal to the higher of
- --- -----
(a) 1.00% above the rate of interest most recently announced by
Deutsche Bank as its prime lending rate for unsecured commercial loans
within the United States; and
(b) 1.00% above the rate per annum at which DBNY, as a branch of a
--- -----
foreign bank, in its sole discretion, can acquire federal funds in the
interbank overnight federal
A-1
funds market, including through brokers of recognized standing.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by Deutsche Bank or DBNY in connection with extensions of
credit.
"Authorized Servicing Officer" means (i) chief financial officer, chief
----------------------------
accounting officer, controller or president, if the Transferor is the Servicer
and (ii) such other officer as the Agent may agree to, if the Transferor is not
the Servicer.
"Average Maturity" means, on any day, that time period (expressed in days)
----------------
equal to the weighted average maturity of the Pool Receivables as shall be
calculated by the Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If the Agent shall disagree with any
such calculation, the Agent may recalculate the Average Maturity for such day,
which calculation shall, absent manifest error, be binding upon the Servicer,
the Transferor and the Transferee.
"Bank Rate" for any Yield Period for any Rate Tranche means a rate per
--------- ---
annum equal to the sum of (a) .30% per annum, plus (b) the Eurodollar Rate
- ----- --- ----- ----
(Reserve Adjusted) for such Yield Period; provided, however, that if (i) it
-------- -------
shall become unlawful for the Agent, any Liquidity Bank or the Enhancement Bank
to obtain funds in the London interbank market in order to fund any Transfer or
to maintain any Rate Tranche, or if such funds shall not be reasonably available
to the Agent, any Liquidity Bank or the Enhancement Bank, or (ii) there shall
not be time prior to the commencement of an applicable Yield Period to determine
a Eurodollar Rate in accordance with its terms, then the "Bank Rate" for any
---------
Yield Period for such Rate Tranche shall be equal to a rate of (x) .425% per
---
annum, plus (y) the Domestic CD Rate (Adjusted) for such Yield Period.
- ----- ----
"Business Day" means a day on which both (a) the Agent at its principal
------------
office in New York City, New York is open for business and (b) commercial banks
in New York City are not authorized or required to be closed for business.
"Collections" means, with respect to any Receivable, all funds which either
-----------
(a) are received by the Transferor or the Servicer from or on behalf of the
related Obligors in payment of any amounts owed (including, without limitation,
purchase prices, finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors (including,
without limitation, insurance payments that the Transferor or Servicer applies
in the ordinary course of its business to amounts owed in respect of such
Receivable and net proceeds of sale or other disposition of repossessed or
returned
A-2
Equipment or other collateral or property of the Obligor or any other party
directly or indirectly liable for payment of such Receivable and available to be
applied thereon), (b) are received by the Transferor or the Servicer in payment
of the purchase price of such Receivable or recourse obligations of any Person
related to such Receivable, whether pursuant to arrangements with the dealers or
otherwise, or (c) are deemed to have been received by the Transferor or any
other Person as a Collection pursuant to Section 3.03; provided that, so long
------------ -------- ----
the Transferor or an Affiliate of the Transferor is the Servicer, late payment
charges, collection fees and extension fees shall not be deemed to be
Collections.
"Commercial Paper Notes" means short-term promissory notes issued or to be
----------------------
issued by the Transferee to fund its investments in accounts receivable or other
financial assets.
"Commercial Paper Rate" for any Yield Period for any Rate Tranche means a
---------------------
rate per annum equal to the sum of (i) the rate or, if more than one rate, the
--- -----
weighted average of the rates, determined by converting to an interest-bearing
equivalent rate per annum the discount rate (or rates) at which Commercial Paper
--- -----
Notes having a term equal to such Yield Period and to be issued to fund the
Transfer of or to maintain such Rate Tranche by the Transferee (including,
without limitation, the Transferee's Tranche Investment and accrued and unpaid
Earned Discount) may be sold by any placement agent or commercial paper dealer
selected by the Agent, as agreed between each such agent or dealer and the
Agent, plus (ii) the commissions and charges charged by such placement agent or
----
commercial paper dealer with respect to such Commercial Paper Notes, expressed
as a percentage of the face amount of such Commercial Paper Notes and converted
to an interest-bearing equivalent rate per annum.
--- -----
"Commitment" has the meaning set forth in Section 1.01.
---------- ------------
"Commitment Termination Date" has the meaning set forth in Section 1.04.
--------------------------- ------------
"Concentration Limit" for any Obligor at any time means the greater of (a)
-------------------
the Special Concentration Limit, if any, for such Obligor and (b) 2.0% of the
Transferee's Investment at such time.
"Contract" means a lease, conditional sale agreement or other contract
--------
between the Transferor and any Person pursuant to or under which such Person
shall be obligated to make payments to the Transferor from time to time.
"Credit and Collection Policy" means those credit and collection policies
----------------------------
and practices relating to Contracts and
A-3
Receivables described in Schedule 6.01(o)-2, as modified without violating
------------------
Section 7.03(c).
- ---------------
"DBNY" has the meaning set forth in the preamble.
---- --------
"Dealer Terminations" means Pool Receivables that have been terminated or
-------------------
prepaid in connection with a trade-in or trade-up or any other reason (other
than a default under such Pool Receivable) in a circumstance where the Obligor
did not make a cash payment to the Transferor in an amount at least equal to the
Unpaid Balance of such Pool Receivable.
"Dealer Termination Ratio" means the ratio (expressed as a percentage)
------------------------
computed as of the last day of each month by dividing (x) the aggregate amount
of the Unpaid Balance of all Dealer Terminations that were terminated or prepaid
during such month by (y) the Collections of Pool Receivables during such month.
"Default Ratio" means the ratio (expressed as a percentage) computed as of
-------------
the last day of each month by dividing (x) the aggregate Unpaid Balance of all
Pool Receivables that are Defaulted Receivables as of such date by (y) the
aggregate Unpaid Balance of all Pool Receivables on such date.
"Default Reserve" on any day means an amount equal to the product of (a)
---------------
the Reserve Percentage at the close of business of the Transferee on such day,
times (b) the sum of (i) the Transferee's Investment at the opening of business
- -----
of the Transferee on such day, plus (ii) the Discount Factor at the close of
----
business of the Transferee on such day, plus (iii) the Discount Amount at the
close of business of the Transferee on such day; provided that from and after
--------
the Commitment Termination Date, the Default Reserve shall be the greater of (1)
the foregoing amount and (2) 6.5% of the sum described in the foregoing clause
------
(b), calculated as of the Month End Date immediately preceding such Commitment
- ---
Termination Date.
"Defaulted Receivable" means a Receivable: (a) as to which any payment, or
--------------------
part thereof, remains unpaid for 90 or more days from the original due date for
such payment, (b) as to which the Obligor thereof is the Obligor on any other
Defaulted Receivable, (c) as to which an Event of Bankruptcy has occurred and
remains continuing with respect to the Obligor thereunder, (d) as to which
payments have been extended, or the terms of payment thereof rewritten, without
the Agent's consent, except as set forth herein or (e) which, consistent with
the Credit and Collection Policy, would be written off the Transferor's books as
uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed as
-----------------
of the last day of each month by dividing
A-4
(x) the aggregate Unpaid Balance of all Pool Receivables that were Delinquent
Receivables at the end of such month by (y) the aggregate Unpaid Balance of all
Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a Defaulted
---------------------
Receivable and: (a) as to which any payment, or part thereof, remains unpaid for
60 days or more from the original due date for such payment; or (b) which,
consistent with the Credit and Collection Policy, would be classified as
delinquent by the Transferor.
"Designated Account" means any bank account into which collections from
------------------
Pool Receivables are deposited.
"Designated Account Agreement" means a letter agreement, in substantially
----------------------------
the form of Exhibit 5.01(h), between the Transferor and any Designated Account
---------------
Bank.
"Designated Account Bank" means any of the banks holding one or more
-----------------------
Designated Accounts.
"Designated Obligor" means, at any time, all Obligors of the Transferor
------------------
except any such Obligor as to which the Agent has, at least three Business Days
prior to the date of determination, given notice to the Transferor that such
Obligor shall not be considered a Designated Obligor.
"Deutsche Bank" has the meaning set forth in the preamble.
------------- --------
"Dilution Percentage" means the higher of (i) 15% times the highest Dealer
------------------- -----
Termination Ratio occurring for the immediately preceding three months and (ii)
10%.
"Dilution Reserve" means on any day an amount equal to the product of (A)
----------------
the Dilution Percentage at the close of business of the Transferee on such day,
times (B) the sum of (i) the Transferee's Investment at the opening of business
- -----
of the Transferee on such day plus (ii) the Discount Factor at the close of
----
business of the Transferee on such day.
"Discount Amount" at any time means an amount equal to (i) the aggregate
---------------
Unpaid Balance of all Eligible Receivables at such time minus (ii) the aggregate
-----
Present Value of all Eligible Receivables at such time.
"Discount Factor" at any time means an amount equal to the sum of the
---------------
aggregate accrued and unpaid Earned Discount with respect to all Rate Tranches
at such time.
"Dollars" means dollars in lawful money of the United States of America.
-------
A-5
"Domestic CD Rate (Adjusted)" for any Yield Period for any Rate Tranche
---------------------------
means a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
---------
1%) determined pursuant to the following formula:
Domestic CD Rate = Domestic CD Rate + Assessment
----------------
(Adjusted) 1-Reserve Rate
Requirement
where:
- -----
"Domestic CD Rate" means, with respect to any Yield Period for any
----------------
Rate Tranche, a rate of interest equal to the average of the secondary
market morning offering rates in the United States for time
certificates of deposit of major United States money market banks for
a period approximately equal to such Yield Period in an amount
substantially equal to the Transferee's Tranche Investment of such
Rate Tranche, as such offering rate is quoted to the Agent by the
Federal Reserve Bank of New York during the morning of the first day
of such Yield Period; provided, however, that if the Agent shall not
-------- -------
receive any such quote by the Federal Reserve Bank of New York by
11:00 a.m., New York City time, on the morning of the first day of any
Yield Period, then "Domestic CD Rate" shall mean, with respect to
----------------
such Yield Period, the rate of interest determined by the Agent to be
the average (rounded upwards, if necessary, to the nearest 1/100 of
1%) of the bid rates quoted to the Agent in the secondary market at
approximately 11:00 a.m., New York City time (or as soon thereafter as
practicable), on the first day of such Yield Period by two certificate
of deposit dealers in New York or New York City of recognized standing
selected by the Agent in its sole discretion for the purchase from the
Agent at face value of certificates of deposit issued by the Agent in
an amount approximately equal or comparable to such Transferee's
Tranche Investment and having a maturity equal to such Yield Period.
"Assessment Rate" for any Yield Period means the annual assessment
---------------
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) applicable to the Agent on its insured deposits, on the Business
Day immediately preceding the first day of such Yield Period, under
the Federal Deposit Insurance Act, determined by annualizing the most
recent assessment levied on the Agent by the Federal Deposit Insurance
Corporation (together with any successor, the "FDIC") with respect to
----
such deposits after giving effect to the most recent rebate granted to
the Agent by the FDIC
A-6
with respect to deposit insurance as well as the loss to the Agent
(determined in the good faith judgment of the Agent) of the use of
such rebate prior to the date a credit is taken by the Agent with
respect to such rebate.
"Reserve Requirement" means, with respect to any Yield Period, a
-------------------
percentage (expressed as a decimal) equal to the daily average during
such Yield Period of the aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in
reserve requirements during such period) specified under Regulation D,
as applicable to the class of banks of which the Agent is a member, on
deposits of the types used as a reference in determining the Domestic
CD Rate and having a maturity approximately equal to such Yield
Period.
"Earned Discount" for any Rate Tranche for each day in a Yield Period
---------------
applicable to such Rate Tranche means an amount equal to the sum of (a) the
product of (i) the Transferee's Tranche Investment of such Rate Tranche on such
day, times (ii) the Transferee Rate for such Rate Tranche on such day, times
----- -----
(iii) 1/360, plus (b) the Negative Spread Fee, if any, for such Rate Tranche on
----
such day. No provision of the Agreement shall require the payment or permit the
collection of Earned Discount in excess of the maximum permitted by applicable
law. Earned Discount for any Rate Tranche shall not be considered paid by any
distribution if at any time such distribution is rescinded or must otherwise be
returned for any reason.
"Eligible Contract" means a Contract in one of the forms set forth in
-----------------
Schedule 6.01(o)-1, with such variations as the Transferor shall approve in its
- ------------------
reasonable business judgment and as shall not result in materially lesser rights
for the Transferor as such forms, or otherwise approved by the Agent.
"Eligible Receivable" means, at any time, a Receivable:
-------------------
(a) generated by the Transferor in the ordinary course of its business;
(b) which constitutes an account, chattel paper or general intangible as
defined in the Uniform Commercial Code as in effect in the jurisdiction that
governs the perfection of the Transferee's undivided ownership interest in such
Receivable;
(c) the Obligor of which is a United States resident, is not an Affiliate
of the Transferor, and is not a government or a governmental subdivision or
agency;
A-7
(d) which is denominated and payable only in Dollars in the United States;
(e) the Obligor of which is a Designated Obligor;
(f) which arises under a Contract (i) in respect of which the related
Equipment has been delivered and unconditionally accepted by the Obligor, (ii)
under which the Obligor has made at least one regularly scheduled payment and
(iii) which is not cancelable by the Obligor before the end of its scheduled
termination date;
(g) which is not a Defaulted Receivable;
(h) with regard to which the warranty of the Transferor in Section 6.01(l)
---------------
is true and correct;
(i) the transfer of an undivided interest in which does not contravene or
conflict with any law or require the consent or approval of, or notice to, any
Person, including the Obligor;
(j) which arises under an Eligible Contract that has been duly authorized
and that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
(k) which, together with the Contract related thereto, does not contravene
in any material respect any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no party to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect if such violation would impair the
collectibility of such Receivable;
(l) which (i) satisfies all applicable requirements of the Credit and
Collection Policy and (ii) complies with such other criteria and requirements
(other than those relating to the collectibility of such Receivable) as the
Agent may from time to time specify to the Transferor following thirty days'
notice;
(m) which is an account receivable, chattel paper or general intangible
representing all or part of the sales price of merchandise, insurance and
services within the meaning of section 3(c)(5) of the Investment Company Act of
1940, as amended;
A-8
(n) which arises out of a current transaction, or the proceeds of which
have been or are to be used for current transactions, within the meaning of
section 3(a)(3) of the Securities Act of 1933, as amended;
(o) which arises under a Contract (i) requiring payment within 30 days of
billing therefor, and (ii) providing for periodic payments in substantially
equal amounts over the scheduled term of the Contract that fully amortize the
initial lease or principal balance;
(p) which is evidenced by a Contract that constitutes either (i) a true
lease pursuant to which the Transferor owns the Equipment free of any Liens
other than such Contract and the Transferee's Interest or (ii) a conditional
sale contract pursuant to which the Transferor has a first priority, perfected
security interest in the related Equipment; and
(q) as to which the Agent has not notified the Transferor that the Agent
has determined, in its sole discretion, that such Receivable (or class of
Receivables) is not acceptable for purchase hereunder.
"Enhancement Agreement" means and includes (a) the Enhancement Agreement
---------------------
dated as of September 14, 1993 among the Transferee, the Agent and DBNY and (b)
any other agreement (other than the Liquidity Agreement or another agreement of
the type described in clause (b) of the definition thereof) hereafter entered
----------
into by the Transferee providing for the issuance of one or more letters of
credit for the account of the Transferee, the making of loans to the Transferee
or any other extensions of credit to or for the account of the Transferee to
support all or any part of the Transferee's payment obligations under its
Commercial Paper Notes or to provide an alternate means of funding the
Transferee's investments in accounts receivable or other financial assets, in
each case, as amended, supplemented or otherwise modified from time to time.
"Enhancement Bank" means and includes DBNY as lender to the Transferee and
----------------
issuer of a letter of credit for the Transferee's account under the Enhancement
Agreement, and any other or additional bank or other financial institution now
or hereafter extending credit or having a commitment to extend credit to or for
the account of the Transferee under the Enhancement Agreement.
"Enhancement Draw" means a drawing under a letter of credit issued pursuant
----------------
to the Enhancement Agreement for the account of the Transferee, a loan to the
Transferee under the Enhancement Agreement or any other advance or disbursement
of funds to the Transferee or for the Transferee's account pursuant to the
A-9
Enhancement Agreement or any such letter of credit, in each case to the extent
such drawing, loan, advance or disbursement has not been repaid or reimbursed to
the Enhancement Bank in accordance with the Enhancement Agreement.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Equipment" means office equipment.
---------
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Yield
---------------------------------
Period for any Rate Tranche, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurodollar
Reserve Percentage
where:
- -----
"Eurodollar Rate" means, with respect to any Yield Period for any Rate
---------------
Tranche, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of the Agent two
Eurodollar Business Days prior to the beginning of such period by
prime banks in the interbank eurodollar market at or about 11:00 a.m.,
New York City time for delivery on the first day of such Yield Period,
for the number of days comprised therein and in an amount equal or
comparable to the amount of the Transferee's Tranche Investment of
such Rate Tranche.
"Eurodollar Business Day" means a day of the year on which dealings
-----------------------
are carried on in the eurodollar interbank market of the Agent's
Eurodollar Office and banks are open for business in London and are
not required or authorized to close in New York City.
"Eurodollar Office" shall mean the Cayman Islands office of the Agent
-----------------
or such other office or offices of the Agent (as designated from time
to time by notice from the Agent to the Transferor) or such other
office or offices through which the Agent determines the Eurodollar
Rate. A Eurodollar Office of the Agent may be, at the option of the
Agent, either a domestic or foreign office.
"Eurodollar Reserve Percentage" means, with respect to any Yield
-----------------------------
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal
A-10
Reserve Board for determining reserve requirements applicable to
"Eurocurrency Liabilities" pursuant to Regulation D.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
-------------------
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 30 consecutive
days; or an order for relief in respect of such Person shall be entered in
an involuntary case under the federal bankruptcy laws or other similar laws
now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Schedule 4.03(a).
---------- ----------------
"Final Pay Out Date" means the date, after the Commitment Termination Date,
------------------
when the Transferee's Percentage has been reduced to zero in accordance with
clause (3) of Section 2.02.
- ---------- ------------
"Funding Advance" means an advance (other than a daylight overdraft
---------------
advance) made by the Agent, in its sole discretion, to the Transferee for the
purpose of funding the Transferee's
A-11
acquisition or maintenance of the Transferee's Interest or a portion thereof.
"Funding Advance Rate" on any day means a rate per annum equal to the
-------------------- ---------
Alternate Base Rate in effect on such day.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
------------------- -------------
"Indemnified Party" has the meaning set forth in Section 13.01.
----------------- -------------
"Lien" means a lien, security interest, charge, or encumbrance, or other
----
right or claim of any Person other than (a) a potential claim or right (that has
not yet been asserted) of a trustee appointed for an Obligor in connection with
any Event of Bankruptcy or (b) an unfiled lien for taxes accrued but not yet
payable.
"Liquidity Agreement" means and includes (a) the Liquidity Loan Agreement
-------------------
dated as of September 23, 1994 among the Transferee, as borrower, the Agent,
DBNY, as lender, and DBNY, as agent for such lender, and (b) any other agreement
hereafter entered into by the Transferee providing for the making of loans or
other extensions of credit to the Transferee secured by a security interest in
the Transferee's Interest (or any portion thereof), to support all or part of
the Transferee's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding the Transferee's Interest, and under which
the amount available from such loans or other extensions of credit is limited to
an amount calculated by reference to the value or unpaid balance of the Pool
Receivables or any portion or category thereof or the level of credit
enhancement available with respect thereto, in each case as amended,
supplemented or otherwise modified from time to time.
"Liquidity Bank" means and includes DBNY as lender under the Liquidity
--------------
Agreement, and any other or additional bank or other financial institution
hereafter extending credit to or for the account of the Transferee under the
Liquidity Agreement.
"Liquidity Loan" means a loan made by a Liquidity Bank to the Transferee
--------------
pursuant to the Liquidity Agreement.
"Losses" means the aggregate Unpaid Balance of Pool Receivables (a) as to
------
which any payment, or part thereof, remains unpaid for 120 or more days from the
original due date for such payment or (b) as to which the Obligor thereof is
subject to a proceeding under Chapter 7 of the Bankruptcy Reform Act of 1978, 11
U.S.C. 101 et seq., as amended.
-- ---
A-12
"Losses to Liquidations Ratio" means the percentage that (x) the aggregate
----------------------------
Losses recognized during the one or six, as applicable, month period ending on
the most recent Month End Date was of (y) Collections of Pool Receivables during
such period.
"Material Adverse Effect" means, with respect to any event, condition or
-----------------------
circumstance, a material adverse effect on:
(i) the business, assets, financial condition, operations or
prospects of the Transferor or the Servicer;
(ii) the ability of the Servicer or the Transferor to perform its
obligations under this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement, any other Transaction Document, the Receivables or the related
Contracts;
(iv) the status, existence, perfection, priority or enforceability of
the Transferee's Interest; or
(v) the collectibility of the Pool Receivables.
"Maximum Investment" means $125,000,000, as such amount may be reduced at
------------------
the option of the Transferor pursuant to Section 1.05.
------------
"Maximum Percentage" means 100%.
------------------
"Month End Date" means the last day of each calendar month.
--------------
"Moody's" means Moody's Investors Service, Inc.
-------
"Negative Spread Fee" means, for any Rate Tranche on any day in a Yield
-------------------
Period applicable to such Rate Tranche (computed without regard to clause (C) of
----------
the proviso to the definition of "Yield Period"), the sum of:
-------
(a) if such day occurs during a period in which a downgraded
Liquidity Bank shall have placed funds in escrow pursuant to the Liquidity
Agreement, an amount designated by the Agent to enable, when taken together
with other amounts similarly designated with respect to other Rate
Tranches, the Transferee to compensate such Liquidity Bank for the excess,
if any, of (x) the Earned Discount which would have accrued on funds in
such escrow account at the Bank Rate if such funds had been designated as a
Liquidity Loan over (y) the income actually earned by investing such funds,
plus
----
A-13
(b) if all or any part of such Yield Period falls in the Pay Out
Period, the amount, if any, by which:
(i) the additional Earned Discount (calculated without taking
into account any Negative Spread Fee) which would have accrued on the
reductions of the Transferee's Tranche Investment of such Rate Tranche
during such Yield Period if such reductions had remained as the
Transferee's Investment, exceeds
-------
(ii) the income, if any, received by the Transferee from
investing the proceeds of such reductions of the Transferee's
Investment.
"Net Pool Balance" at any time means an amount equal to xxxxxxxxxxx
----------------
xxx xxx xxxxxxxxx xxxxxxx xxxxx xx xxx xxxxxxxx xxxxxxxxxxx xx xxx
xxxxxxxxxxx xxxx xx xxxx xxxx, xxxxx
-----
xxx xxx xxxxxxxxx xxxxxxxxxxxxxxxxxx xx xxx xxxxxxx xx xxxxx xxx xxx
xxxxxx xxxxxxx xx xxx xxxx xxxxxxxxxxx xx xxxx xxxxxxx xxxxxxx xxxx xxx
xxxxxxxxxxxxx xxxxx xxx xxxx xxxxxxx xx xxxx xxxx, xxxxx
-----
xxx xxx xxxxxxxxx xxxxxx xx xxxxxxxx xxxxxxxx xxx xxxxxxx xxxxx
xxxxxxx xx xxx xxxx xxxxxxxxxxx.
"Obligor" means a Person obligated to make payments with respect to a
-------
Receivable. In the case of an Obligor which is an Affiliate of any other
Obligor, the Concentration Limit, the Special Concentration Limit, if any, and
the aggregate Unpaid Balance of Pool Receivables of such Obligors shall be
calculated as if such Obligors were one Obligor.
"Pay Out Period" means the period from and including the Commitment
--------------
Termination Date and to and including the Final Pay Out Date.
"Pay Out Servicer's Fee" at any time means an amount equal to the product
----------------------
of
(a) the Transferee's Investment at such time, times
-----
(b) (i) the percentage per annum set forth in clause (a)(x) of the
--- ----- -------------
definition of the "Servicer's Fee", or (ii) if the Servicer's Fee is
calculated pursuant to clause (b) of such definition, the percentage per
---------- ---
annum determined for each day by dividing the amount of the Servicer's Fee
-----
accrued for such day by the Transferee's Investment at the close of
business on such day, multiplying
A-14
the quotient by 360 and expressing the product as a percentage, times
-----
(c) a fraction, the numerator of which is the then Adjusted Average
Maturity of the Receivables Pool and the denominator of which is 360.
"Pay Out Statement" means a statement substantially in such form as shall
-----------------
be proposed by the Agent and agreed to by the Transferor, such agreement not to
be unreasonably withheld.
"Periodic Report" means a report in substantially the form of Exhibit
--------------- -------
3.05(a).
- -------
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
---------------
"Post Office Box" means any U.S. post office box to which the Obligors are
---------------
directed to, or do, send payments under the Pool Receivables.
"Post Office Box Agreement" means an executed and undated notice, in
-------------------------
substantially the form of Exhibit A from the Transferor to the applicable U.S.
---------
postal office.
"Present Value" of any Receivable means, at any time, the present value of
-------------
xxx xxxxxx xxxxxxx xxxxxxx, xxxxxxxxxx xx xxx xxxx xx xxxxxxxxxxxxx, xx x xxxx
xxxxx xx xxx xxxxx xxxx xxxx xxx xxxxxxx xx xxx xxx xxx xxxxx xxxxxxxxxx xxxx
----
xxxxxxxx xxxxxxxxx xxx xxx xxx xxxxxxxxxxxx xxxxx xx xxxxxxxx xx xxx xxxxxxxx
xxxxxxxx xxxx x xxxxxxxx xxxxx xx xxx xxxx xxxxxxx xxxxxxxx; xxxxxxxx xxxx xx
--------
xxx xxxxxxxxxx xxx xxxxxxx xxxx xxx xx xxxxxxxx xxxx xxxx xxxxxxxxx, xxx xxxx
xxx xxxxxxxx xx xxxx xxxxxx xxxx xxxx xx xxx xxxxx xxxxxxxx xxxx xxxx xxx
-----------
xxxxxxxxxx xx xxxxxxxxx xx xxx xxxxxxxx xx xxxx xxxxxxxxx xx xxx xx xxxxxxxx
xxxx xxx, xxx xxxx xxx xxxxxxxx xx xxxx xxxxxx xxxx xxxx xx xxx xxxxxx xxxxx xx
-----------
xxxx xxx.
"Program Fee" has the meaning set forth in Fee Letter.
-----------
"Program Fee Rate" has the meaning set forth in the Fee Letter.
----------------
"Program Information" has the meaning set forth in Section 14.08.
------------------- -------------
A-15
"Program Information Provider" has the meaning set forth in Section 14.08.
---------------------------- -------------
"Rate Tranche" has the meaning set forth in Section 2.03.
------------ ------------
"Receivable" means any right to payment from a Person, whether constituting
----------
an account, chattel paper, instrument or general intangible, arising from the
sale or lease by the Transferor of Equipment, and includes the right to payment
of any interest or finance charges and other obligations of such Person with
respect thereto.
"Receivables Pool" means at any time all then outstanding Receivables which
----------------
(a) were or are generated at any time by the dealers listed on Schedule A-1,
------------
including all divisions and trade names of such dealers (as such list may be
amended from time to time with the written consent of the Transferor and the
Agent) and such other dealers as designated from time to time by Transferor and
approved in writing by the Agent, and (b) as to which the Obligors thereunder
are Designated Obligors.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
------------
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" means, relative to any Affected Party
-----------------
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law applicable
to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with the
interpretation or administration of any law referred to in clause
------
(a)(i) or of (B) any fiscal, monetary or other authority having
------
jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and affecting
the application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to in
clause (a)(i) or (a)(ii) above; or
------------- -------
A-16
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
------------- ------- --------
above; or
(c) the issuance, publication or release of any regulation,
interpretation, directive, requirement or request of a type described in
clause (a)(ii) above to the effect that the obligations of a Liquidity Bank
--------------
under the Liquidity Agreement are not entitled to be included in the zero
percent category of off-balance sheet assets for purposes of any risk-
weighted capital guidelines applicable to such Liquidity Bank or any
related Affected Party.
"Reinvestment" has the meaning set forth in Section 1.01.
------------ ------------
"Reinvestment Period" means the period from and including the date hereof
-------------------
to but excluding the Commitment Termination Date.
"Related Property" means, with respect to any Pool Receivable: (a) all of
----------------
the Transferor's right, title and interest in and to all Contracts, purchase
orders or other agreements or documents that evidence, secure or otherwise
relate to such Pool Receivable; (b) all of the Transferor's interest in the
Equipment (including returned Equipment), the sale or lease of which gave rise
to such Pool Receivable; (c) all Liens from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise, and all property subject to such Liens; (d)
all UCC financing statements covering any collateral securing payment of such
Pool Receivable (to the extent of the interest of the Transferee in the related
Pool Receivable); (e) all guarantees and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; (f) all books and records evidencing or otherwise relating to any
Pool Receivables or any of the foregoing; and (g) all Collections with respect
to, and other proceeds of, such Pool Receivables and any of the property
described above.
"Reserve Percentage" means, on any day the greatest of (i) three times the
------------------
highest sum of the Delinquency Ratio plus the Default Ratio on the last day of
any of the 12 calendar months preceding or ending on such day, (ii) three times
the highest Losses-to-Liquidations Ratio on the last day of any of the 12
calendar months preceding or ending on such day and (iii) 15%.
"Scheduled Commitment Termination Date" has the meaning set forth in
-------------------------------------
Section 1.04.
- ------------
A-17
"Servicer" has the meaning set forth in Section 8.01.
-------- ------------
"Servicer's Fee" accrued for any day means
--------------
(a) an amount equal to (x) .75% per annum, times (y) the amount of
--- ----- -----
the Transferee's Investment at the close of business on such day, times (z)
-----
1/360; or
(b) on and after the Servicer's reasonable request made at any time
when the Transferor shall no longer be the Servicer, an alternative amount
specified by Servicer not exceeding (x) 115% of the Servicer's cost and
expenses of performing its obligations under the Agreement during the Yield
Period when such day occurs, divided by (y) the number of days in such
Yield Period.
With respect to any Rate Tranche, the Servicer's Fee allocable thereto shall be
equal to the Servicer's Fee determined as set forth above times a fraction, the
-----
numerator of which is the Transferee's Tranche Investment of such Rate Tranche
and the denominator of which is the Transferee's Investment.
"Servicer's Fee Reserve" at any time means an amount equal to the sum of
----------------------
(a) the aggregate accrued and unpaid Servicer's Fee (with respect to all Rate
Tranches), plus (b) the Pay Out Servicer's Fee at such time.
----
"Settlement Date" means the last day of each Settlement Period.
---------------
"Settlement Period" for any Rate Tranche means
-----------------
(a) each period commencing on the first day of each Yield Period for
such Rate Tranche and ending on the last day of such Yield Period; and
(b) on and after the Commitment Termination Date, such period
(including, without limitation, a period of one day) as shall be selected
from time to time by the Agent or, in absence of any such selection, each
period of thirty days from the next preceding Settlement Date;
provided, however, that
- -------- -------
(i) with respect to any Yield Period of one day, the related
Settlement Period shall be the first day following such Yield Period;
(ii) any Settlement Period which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business
Day; and
A-18
(iii) the last Settlement Period shall end on the Final Pay Out Date.
"S&P" means Standard & Poor's Ratings Group.
---
"Special Concentration Limit" for any Obligor at any time means the amount,
---------------------------
if any, most recently designated by the Agent in a writing delivered to the
Transferor as the Special Concentration Limit for such Obligor.
"Subsidiary" means a corporation of which the Transferor and/or its other
----------
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Support Agreement" means the Support Agreement, dated as of June 1, 1994,
-----------------
between the Transferor and Alco Standard, as it may be amended, supplemented or
otherwise modified from time to time.
"Termination Event" has the meaning set forth in Section 10.01.
----------------- -------------
"Transaction Documents" means this Agreement and the other documents to be
---------------------
executed and delivered in connection herewith.
"Transfer" has the meaning set forth in Section 1.01(a).
-------- ---------------
"Transfer Request" has the meaning set forth in Section 1.03.
---------------- ------------
"Transferee" has the meaning set forth in the preamble.
---------- --------
"Transferee Rate" for any Yield Period for any Rate Tranche means:
---------------
(a) in the case of a Rate Tranche other than one referred to in clause
------
(b) or (c) of this definition, the Commercial Paper Rate for such Rate
--- ---
Tranche for such Yield Period;
(b) in the case of a Rate Tranche funded by a Funding Advance, a rate
per annum equal for each day in such Yield Period to the Funding Advance
---------
Rate in effect on such day; and
(c) in the case of a Rate Tranche funded pursuant to the Liquidity
Agreement or by an Enhancement Draw, the Bank Rate for such Rate Tranche
for such Yield Period;
provided, however, that on any day when any Termination Event shall have
- -------- -------
occurred and be continuing, the Transferee Rate shall
A-19
mean a rate per annum equal to the sum of the applicable rate pursuant to clause
--- ----- ------
(a), (b) or (c) above on such day plus .70% per annum.
- --- --- --- --- -----
"Transferee's Allocation" has the meaning set forth in Section 2.02.
----------------------- ------------
"Transferee's Interest" has the meaning set forth in Section 2.01.
--------------------- ------------
"Transferee's Investment" at any time means an amount equal to
-----------------------
(a) the aggregate of the amounts theretofore paid to the Transferor
for the acquisition of the Transferee's Interest by Transfer pursuant to
Sections 1.01(a) and 1.03, less
---------------- ---- ----
(b) the aggregate amount of Collections theretofore received by the
Servicer and actually distributed to the Agent for the account of the
Transferee on account of such Transferee's Investment pursuant to Sections
--------
3.01 and 3.02;
---- ----
provided, however, the Transferee's Investment shall not be considered reduced
- -------- -------
by any distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason.
"Transferee's Percentage" has the meaning set forth in Section 2.02.
----------------------- ------------
"Transferee's Share" of any Collections means a portion of such Collections
------------------
in an amount equal to the product of (a) the amount of such Collections, times
-----
(b) the Transferee's Percentage as in effect on the date of determination.
"Transferee's Tranche Investment" has the meaning set forth in Section
------------------------------- -------
2.03.
- ----
"Transferor" has the meaning set forth in the preamble.
---------- --------
"Transferor Information" has the meaning set forth in Section 14.07.
---------------------- -------------
"Transferor's Collection Amount" at any time means an amount equal to the
------------------------------
excess, if any, if (a) the aggregate of the amounts theretofore paid by the
Servicer to the Transferor for Reinvestment pursuant to Section 3.01(a)(iii),
--------------------
over (b) the aggregate of the amounts, if any, theretofore paid by the
- ----
Transferor to the Servicer pursuant to the last sentence of Section 3.01(b).
---------------
A-20
"Transferor's Share" of any Collections means a portion of such Collections
------------------
equal to the amount of such Collections less the Transferee's Share thereof.
----
"UCC" means the Uniform Commercial Code as from time to time in effect in
---
the applicable jurisdiction or jurisdictions.
"Unadjusted Transferee's Percentage" has the meaning set forth in Schedule
---------------------------------- --------
2.02.
- ----
"Unmatured Termination Event" means any event which, with the giving of
---------------------------
notice or lapse of time or both, would, unless cured or waived, become a
Termination Event.
"Unpaid Balance" of any Receivable means at any time the aggregate
--------------
scheduled lease or debt service payments that the Obligor is obligated to make
thereunder during the period from the date such Receivable is included in the
Receivables Pool to the date that is 60 months thereafter, but excluding all
---------
late payment charges, delinquency charges, extension or collection fees and
sales tax payments.
"Yield Period" means with respect to any Rate Tranche, each period
------------
(a) commencing on, and including, the date of creation of such Rate
Tranche pursuant to Section 2.03, or the last day of the immediately
------------
preceding Yield Period for such Rate Tranche (whichever is later); and
(b) ending on, and excluding, the date that falls
(i) in the case of a Rate Tranche funded by the issuance of
Commercial Paper Notes, except as provided in clause (iii) below, such
------------
number of days (not to exceed 180 days or, after the occurrence and
during the continuance of any Termination Event, 60 days) thereafter
as the Agent shall select, after consultation with the Transferor;
(ii) in the case of a Rate Tranche funded by Liquidity Loans or
by an Enhancement Draw, (A) if the Transferee Rate for such Yield
Period is based on the Domestic CD Rate (Adjusted), 1, 7, 14, 30, 60
or 90 days thereafter, and (B) if the Transferee Rate for such Yield
Period is based on the Eurodollar Rate (Reserve Adjusted), one day,
one week, one month, two months or three months thereafter (or, if
such month has no numerically corresponding day, on the last Business
Day of such month), in either case as the Agent may select; and
A-21
(iii) in the case of (A) any Rate Tranche funded by a Funding
Advance, and (B) any other Rate Tranche, if the Transferee Rate for
such Yield Period is based on the Alternate Base Rate, such number of
days thereafter as the Agent may select in its sole discretion;
provided, however, that
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(A) any Yield Period (other than a Yield Period consisting of one
day) which would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day (unless the Transferee Rate
for the related Rate Tranche for such Yield Period shall be based on the
Eurodollar Rate (Reserve Adjusted), in which case if such succeeding
Business Day is in a different calendar month, such Yield Period shall
instead be shortened to the next preceding Business Day);
(B) any Yield Period of one day for any Rate Tranche, (I) if such
Yield Period is the initial Yield Period for a new Rate Tranche created in
connection with a Transfer, shall be the day of the Transfer of such Rate
Tranche, and (II) if such Yield Period is not the initial Yield Period for
such Rate Tranche (or, in the case of a Rate Tranche created by division or
combination pursuant to Section 2.03, any predecessor Rate Tranche), (x) if
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the immediately preceding Yield Period is more than one day, shall be the
last day of such immediately preceding Yield Period, and (y) if the
immediately preceding Yield Period is one day, shall be the next day
following such immediately preceding Yield Period;
(C) any Yield Period which commences before the Commitment
Termination Date and would otherwise end after the Commitment Termination
Date shall end on the Commitment Termination Date; and
(D) subject to clause (ii) above, each Yield Period which commences on
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or after the Commitment Termination Date shall be of such duration as the
Agent may select in its sole discretion.
The "related" Yield Period for any Rate Tranche at any time means the Yield
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Period pursuant to which Earned Discount is then accruing for such Rate Tranche.
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